Toyota is world’s biggest automaker, but surprisingly in India it has only three percent market share. Toyota wants to make its mark in Indian car market as well where the top selling brands are Maruti Suzuki, Hyundai and Tata. India is emerging as 2nd largest auto market in the world and Toyota wants to capture this market. Toyota Motor plans to achieve this goal by launching its first small car in India by end of 2010. It will be showcased in upcoming Auto Expo in January 2010 to be held at New Delhi, India.
Toyota in INDIA – Current Status
Currently Toyota manufactures Fortuner- sport utility vehicle, Corolla sedan and Innova a multipurpose vehicle. Other Vehicles which Toyota import and markets includes Camry sedan, Qualis, Land Cruiser Prado SUV and Land Cruiser.
Toyota begun its operation around 11 years ago in India and since then it has crossed the sales of over 400,000 units. At present company is known as Toyota Kirloskar Motors as it is joint venture between Kirloskar Group and Toyota Motors. 89 percent shares of Toyota Kirloskar Motors are owned by Toyota Motors Co., while the remaining shares are owned by India’s Kirloskar group.
Toyota’s Plan for Small Cars in India
For Toyota’s upcoming project to manufacture small car they have set the benchmark as Hyundai i20 and Maruti Swift. Toyota plans to make the car 10 % more fuel efficient than the i20 and Swift. The new model of Toyota will be powered by four cylinder 1.2 liter gasoline engine and at later stage it will also consider diesel option. Toyota is still deciding on engine specifications in order to get the benefits of excise duty for small cars. At present, in India, small car engines are charged 8% duty against 20% duty levied on big car engines.
Toyota Kirloskar Motors will start manufacturing the small car at its 2nd industrial unit which is being built up at Bangalore with the investment of about Rs. 32 billion (US$ 680 million). Toyota’s new plant will be located in the same complex of their existing factory.
Toyota Motors Co. plans to follow the footsteps of global car makers like Volkswagen AG, Nissan Motor Co. Ltd and Ford Motor Co. and venture in the India’s small car market. Understanding the fact that India is price-sensitive market, Toyota is trying hard to reduce the costs. To make it cost competitive Toyota is considering importing auto parts from other ASEAN countries like Thailand and Indonesia.
Major chunk of Indian Auto market is captured by Hyundai Motor Co., Tata Motors Ltd. and Suzuki Motor Corp. With the introduction of small car in India, Toyota is planning to improve the market share in Indian automobile market.
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