Toyota to build Daihatsu small car plant in Bangalore

Toyota, Daihatsu to build small-car factory in India
Yahoo News

Toyota Motor Corp. and subsidiary Daihatsu Motor Co. plan to set up a small-car assembly factory in Bangalore, southern India, at a cost of more than 10 billion yen, company officials said Thursday.

Toyota and Daihatsu plan to start the manufacturing there by the end of 2007 with an eye to turning out 100,000 cars a year, the officials said.

The car to be built in India will be modeled after the small car they earlier co-developed and started selling under two separate brands in Japan -- the Toyota Passo and Daihatsu Boon.

Both the Passo and Boon come with 1.0-liter and 1.3-liter engine options.

The Passo is one of the more affordable models in Toyota's vehicle lineup. The Indian version is likely to be priced even lower, they said.

Toyota is following a strategy of boosting production in the so-called BRICs camp of emerging economies -- Brazil, Russia, India and China. It started building a new factory in Russia in June and earlier established production bases in India, Brazil and China.

In Bangalore, Toyota is assembling the Corolla passenger car at a joint venture with a local concern. The venture began production in 1997. The envisioned Toyota-Daihatsu factory will be built in the neighborhood of the existing venture.

In 2004, Toyota manufactured 48,000 vehicles, including the Corolla, in India.

The establishment of the planned factory would be Daihatsu's first foray into the country.

Since Daihatsu has expertise in small-car production, it will play a leading role in running the new Bangalore factory, the officials said.

The Indian passenger car market swelled to 1.1 million vehicles in 2004, up 20 percent over the preceding year.

The biggest auto-making player in the Indian car market is the joint venture between Suzuki Motor Corp. and Maruti Udyog Ltd., which holds a 50 percent share.

Toyota has less than 5 percent of the market at present.


Update:

Toyota, Daihatsu Won't Confirm New Factory
Associated Press / Forbes

Japanese automakers Toyota Motor Corp. and Daihatsu Motor Co. refused to confirm a media report that they have agreed to start producing small passenger cars at a new factory to be built in southern India.

The Nihon Keizai Shimbun reported Thursday that the two companies planned to assemble 100,000 cars a year at a 10 billion yen (US$89 million; euro75 million) plant to be built in Bangalore.

The automakers planned to produce vehicles for the Indian market as early as 2007 based on the Passo model they have codeveloped, the business daily reported citing unnamed sources.

Toyota spokesman Hideki Fujii said that while Toyota was interested in expanding into the Indian market, nothing had been decided yet. Daihatsu also refused to confirm the report.

Toyota's sales in India peaked in 2004 at 48,000 vehicles, up 3.5 percent from the previous year, and the company was looking at ways to continue that trend, Fujii said.

The Nikkei said India's auto market is expected to roughly double by 2010 to sales of 2 million vehicles amid a burgeoning middle class in a booming economy.

At present, Japanese rival Suzuki Motor Corp. commands a 50 percent share of the local market. Toyota hoped to double its own share to 10 percent by 2010 through its agreement with Daihatsu, the Nikkei said.

Toyota and Daihatsu are already cooperating in other emerging markets like Indonesia, Pakistan and Venezuela, Fujii said.