Toyota to make compact at 2nd India plant

Toyota Motor Co. plans to launch a compact car in India by late 2009 and expects to sell 52,000 units in the first year, the Mint paper said today.

The car, which would mark Toyota's entry in the segment that makes up more than two-thirds of passenger vehicle sales in India, would be made at a proposed second plant, the paper said, citing component makers who have been asked to submit bids.

The paper said Toyota would make a new model with a 1.2-liter gasoline engine and a 1.4-liter diesel engine, and the factory will have an output capacity of 100,000 units a year.

A spokesman for Toyota said the report was speculative, and reiterated its Indian unit, Toyota Kirloskar Motors Ltd., was still studying the market for a second plant.

A source told Reuters in February that Toyota would make a decision in April on where it would build its ultra low-cost car, currently under development, with India topping the list of global candidates.

The Nikkei business daily in February said Toyota planned to build a second plant in India by 2010, close to its existing plant, with an investment of up to $410 million, with the intention of producing 100,000 cheap, smaller model cars a year.

Toyota's plant near Bangalore in southern India has a capacity of 60,000 units and the company has land adjacent to the existing plant to accommodate a second plant.

Toyota, Japan's top automaker and the second largest in the world, has said it wants 10 percent of the fast-growing Indian market by 2010, when annual sales are expected to nearly double to 2 million units.

Toyota sold 48,000 vehicles in India in 2006, including the seven-seater Innova, the Corolla, and the imported Camry sedan and Prado sport utility vehicle.

A compact car would take on products from leader Suzuki Motor Corp.'s majority-owned Maruti Udyog Ltd., Hyundai Motor Co. and Tata Motors Ltd.

French car maker Renault launched its no-frills Logan car in India last week with joint venture partner Mahindra & Mahindra Ltd.

General Motors Ltd. is expected to launch the Chevrolet Spark later this month, and Volkswagen will also make compacts in India from 2009.