Toyota tunes expansion engine for next thrust

 Auto major Toyota Kirloskar Motor (TKM) is gradually expanding capacity at its plant in Bidadi anticipating spurt in demand for its products.

The car maker has two plants that constitute the Bidadi facility, which produces over 2 lakh car units annually. In the short term, the first plant (Plant 1), which manufactures the Innova and Fortuner, will be expanding capacity from 90,000 to 100,000 cars per year, while the newer Plant 2, which manufactures sedans Etios and Corolla Altis, and the hatchback Etios Liva, will ramp up to 210,000 cars from the current 120,000.

This capacity expansion drive, which will commence from January next year, will take TKM's total car production to 310,000. Addressing reporters this week, TKM Deputy Managing Director Sandeep Singh said, “This year has been good for us, though the market has been rather volatile. We expect to sell more than 170,000 cars this year.”

The company is also increasing dealership network to more than 200 by the end of December, from the current 195. “We are exploring business opportunities in smaller towns and targeting semi-urban areas.

We expect growth to take place here, and hence, dealerships are being opened in these regions. By March 2013, we plan 230 dealerships in all,” Singh said, adding that the dealerships, depending on location, will be set up at investments of between Rs 75 lakh and Rs 10 crore.

Toyota is not considering new car launches in the near future, Singh said. The company is riding high on the back of the largely successful Etios and its hatchback variant, the Liva.

“The Etios and Liva have done well. Our focus for the next two years will be to further grow the market for these models,” Singh said.

He, however, hinted that launches of existing model variants could be in the offing.
Rupee depreciation has hit the auto industry hard this year, whose operations involve imports of parts and spares from manufacturers and suppliers abroad.

Singh said that currency depreciation has hit the company in terms of margins, which may result in passing on some of the costs to customers.

A hike in car prices may be expected sometime in January next year, Singh said.
He said that if the government pushes its reforms agenda further simultaneously with RBI reducing interest rates, the car market would get a much-needed breather.

OnTKM will export 20,000 cars to South Africa this year. Its Etios model, a car Toyota says has specifically designed for Indian conditions, is popular in export markets as well.

Exports to Brazil

TKM’s captive engine and transmission manufacturing unit Toyota Kirloskar Auto Parts (TKAP) has announced that it will begin export of transmission systems to Brazil by January next year.

Currently, besides catering to growing domestic requirements, TKAP exports transmission systems and components to Thailand, Indonesia and Argentina.
TKAP invested over Rs 500 crore last year, towards manufcaturing gasoline engines and transmission systems for the Etios, and next year, the unit will have a capacity to produce 4 lakh transmission systems. 

TKAP is expecting a turnover of Rs 2,000 crore this fiscal ending March 2013.