Toyota to invest Rs 3,200 cr in India

Undeterred by a slowdown in car demand, Japanese auto major Toyota said it would almost double its investment for its second plant at Bangalore to Rs 3,200 crore (Rs 32 billion) by pumping an additional Rs 1,553 crore (Rs 15.53 billion).

'An additional amount of around 33 billion Yen (about Rs 15.53 billion) will be invested for both general-purpose and specialised equipment necessary for manufacturing a new compact vehicle, ' the company said in a statement. The company had earlier said it would invest about Rs 1,650 crore (Rs 16.5 billion or 35 billion Yen) on its second plant in Bangalore, which would manufacture its 'strategic small car' to be launched by 2010-11.

The new plant, being constructed by Toyota Kirloskar Motor at the same site of its first plant, will have an initial capacity of 1,00,000 units.

'TMC is expanding its local production in India and is actively investing to create attractive products. Its policy is to continue to contribute to the development of India's automotive industry and to the country's overall economy,' the statement added. Besides the small car, TKM plans to produce its passenger car, Corolla, from the upcoming plant.

'The aim is to meet the broad needs of customers in India, where motorisation is expanding rapidly. Both TKM plants will play an important role in TMC's sustainable plant activities, which seek to emphasise the role of nature in creating production sites that are in harmony with their natural surroundings,' the statement added.

TKM's existing plant, which produces Corolla and Innova, has a capacity of 60,000 units per annum. Once production begins at the second plant in 2010, the two plants would have a combined annual production capacity of 1,60,000 vehicles.

The company's announcement comes at a time when the Indian automobile industry is going through a rough time with passenger car sales during April-September period registering only a 5.39 per cent growth. The segment grew by about 12 per cent in 2007-08 fiscal.