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Toyota-Kirloskar expansion in Karnataka hits a bump

From thehindubusinessline| April 29,2007

Bangalore April 27 A recent High Court ruling may force passenger carmaker Toyota Kirloskar to scout for land outside Karnataka for expanding its operations.

The Tatas' reported plan for setting up a factory in North Karnataka may also have to be reworked after the Karnataka High Court refused to vacate its March 26 order which directed the Karnataka Industrial Areas Development Board (KIADB) not to acquire agricultural land for setting up industries.

A Toyota official did not respond to a query whether the company is looking at reworking its expansion plan. The State Industries Minister, Mr K. Subramanya Naidu, too declined to comment on the High Court order. "Let me first get the full report. We will see what needs to be done after that," Mr Naidu told Business Line.

Last year, Toyota officials had met several top Government officials as well as State ministers for seeking an additional 300 acres for its expansion project. But with the current ruling, Toyota may now have to look at other States for setting up a new plant.

There is, of course, a ray of hope for the Government as the judge has, in his ruling, said that he would refer the petition to the Chief Justice as the case was more in nature of a public interest litigation petition.

Though there is no official confirmation on the reported move by Toyota to set up a new factory, the company is learnt to be already working on a new small car for emerging markets such as India.

It is learnt that it wants to expand its existing plant at Bidadi near Bangalore as it already has most of the vendors in place there. The Toyota Kirloskar Auto Parts Company is also located near the car plant and it supplies parts to multi utility vehicle Innova.

In fact, Toyota is learnt to have already initiated discussions with the Karnataka Government for laying a railway track between the factory and the nearest railway station.

The additional land was also sought for setting up facilities for suppliers and also for setting up a housing complex for its employees.

Toyota Kirloskar currently has around 400 acres of land of which only about 130-140 acres is being utilised. Toyota has set a target of 10 per cent share in the domestic market by 2010.

 

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