New Delhi: Toyota is reworking its investment plans in India through cost-cutting measures.
Akira Okabe, Senior Managing Director, Toyota Motor Corporation, said Toyota group continued to have confidence in the Indian Market for which it had announced a second plant for a compact car.
"While there are no changes in the plans for the small car, in the final stages we may have to rethink the initial investment to adjust to market conditions, keeping the eventual target the same," said Okabe, who also serves as Mentor of the Toyota Board.
Okabe was speaking at the launch of the company's new SUV, Fortuner, here on Monday.
Toyota Kirloskar Motor, the Group's Indian venture, had announced an investment of Rs 3,200 crore in the second plant for its small car project at Bidadi, near Bangalore.
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Through the Japanese philosophy on continuous improvement, Kaizen, undertaken to save cost and control investments, TKM is reworking its plans but could not share a figure yet. Vikram Kirloskar, Vice-Chairman, TKM, pointed out that the proposed investment at the time of launching Qualis had also come down by 15-20 per cent through similar measures.
"While we are No 1 in the world, we are like a baby compared to Maruti. Profitability is low and scale small, but in three years, with the compact car we expect to grow three folds," said Okabe.
While the global situation was "very, very miserable," India, in comparison, was in a better position, according to Toyota.
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Its compact car is expected to hit the roads between end of 2010 and beginning 2011. TKM plans to launch with 70,000 units; the second plant will have a total capacity of 200,000 units. "We will also look at the possibility of exports," said Okabe.
The company's current market share in passenger cars is three per cent, and it expects to reach double digit market share by 2015.
Toyota Kirloskar on Monday launched the Fortuner, an SUV that it expects will win over aspiring owners of other such vehicles and sedans.
The company, which offers brands such as the Innova, hopes to sell 2,000 of the SUVs by the end of December.
Priced at Rs 18.45 lakh (ex-showroom New Delhi), the Fortuner is equipped with a 3.0-litre, D-4D diesel engine.
Acknowledging a big drop in SUV sale in the last three-four months, Sandeep Singh, Deputy Managing Director, Marketing, said the gap in the market indicated that customers were not happy with what's available.
Globally, Toyota has sold 76,000 Fortuners.
TKM, whose portfolio includes the Land Cruiser, the Innova and the Corrola Altis in India, is expecting sales to be nearly flat this year. Last year it sold 51,800 vehicles; this year it is aiming for 52,000.
"Production is being ramped up and is coming back to last year's May-June levels," said Singh.
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