Toyota Motor Corp. will introduce its first small car in India, with a 1.2-liter gasoline engine and is also considering offering a diesel engine option, a senior executive at its local unit said Friday.
"We are well on track to launch the small car by end-2010 and will showcase it during the upcoming (New Delhi) Auto Expo in January," Sandeep Singh, deputy managing director at Toyota Kirloskar Motor Pvt. Ltd., told reporters. The week-long auto show starts Jan. 5.
A small car will likely help Toyota strengthen its position in India, where it trails Suzuki Motor Corp., Hyundai Motor Co. and Tata Motors Ltd.
Hatchbacks comprise nearly two-thirds of total car sales in the country, where annual sales are forecast to grow about threefold to three million units by 2016.
Car sales in India started rising in February this year, aided by several federal government stimulus packages and a cut in lending rates by commercial banks.
Toyota Kirloskar's sales fell 7.4% during April-September 2009 to 27,477 vehicles. That compares with a 15% rise in local industry car sales to 689,339 vehicles during this period.
Toyota Kirloskar, which is 89% owned by Toyota and the remainder by India's Kirloskar group, also plans to unveil the Prius hybrid sedan in India during the automotive show, Mr. Singh said.
He said the company will start selling the Prius in India if it receives positive feedback from customers.
Toyota Kirloskar will produce the new small car at its second factory, being built with an investment of 32 billion rupees ($682.8 million) near the southern city of Bangalore.
The new factory will be located in the complex of the existing plant, where Toyota currently produces the Innova multipurpose vehicle, Corolla sedan and the Fortuner sport utility vehicle. It also imports and markets the Land Cruiser and Land Cruiser Prado SUVs as well as the Camry sedan.
Toyota is among several global car makers, such as Ford Motor Co., Nissan Motor Co. Ltd. and Volkswagen AG, who have either forayed into the Indian small car market or have announced plans to do so from next year.
"We are committed to the 32 billion rupees investment and will start the second plant with an initial capacity of 70,000 cars a year," Mr. Singh said.
Toyota Kirloskar will increase the prices of all its vehicles in January due to rising raw material prices.
"Raw material prices have started rising again and we will have to increase prices by January," Mr. Singh said, adding that the size of the increase will be decided by December.
Mr. Singh added that Toyota Kirloskar will raise production of the recently launched Fortuner SUV to 800 vehicles per month from January, up from 500, due to strong demand.
"We have stopped fresh bookings for the Fortuner as there is a huge waiting list," he said. "We will increase production to clear the pending orders."
