Betting big on India, joint-venture Toyota Kirloskar Motor Private Limited is setting up its second factory with an investment of Rs 3,200 crore to produce compact cars. Hiroshi Nakagawa, managing director of Toyota Kirloskar Motor, spoke to FE's Saikat Neogi about the company's India plans and future of small cars in India. Excerpts:
What kind of new models are you showcasing in the forthcoming Auto Expo in Delhi?
We will display around 14 production and concept vehicles, including our low-cost compact car, at the Auto Expo in Delhi. The compact car has been conceptualised especially for India. We are also working on plans to showcase Toyota Prius hybrid at the expo.
How much potential do you see in the small and compact car market in India and how do you plan to tap it?
The small car segment is very good in India and nearly 75% of the demand is in the small car segment. At present, Toyota has no product in the small car segment and we are likely to create a small car for the Indian market. We would take a year to put things in place and by the end of 2010 we will start production in India. We plan to roll out 70,000 units of the proposed compact car in the first year of production. We will also look at the export market because there is a big opportunity there. But currently, our main focus will be on the domestic market and we will concentrate on it for the small car segment. If you succeed in a competitive market like India, then you will succeed in the overseas market, too. We also see a great potential for the hybrid car market in India as the government is keen on low-emission cars.
How much are you investing in India at the moment?
We are investing Rs 3,200 crore in a second factory at Bidadi near Bangalore, which is the same place where we have our existing factory. The first factory was set up in 1997 with an investment of Rs 2,000 crore.
How much of your global sales are out of India?
India contributes around 3-5% of Toyota's global sales and we plan to take it to 10% in the next few years. Our plan is to become an important and long-term player in the Indian market.
Do you think that there are too many players in the Indian auto industry?
All the global auto