Thaindian News

Chennai, July 27 (IANS) Indo-Japanese car manufacturer Toyota Kirloskar Motor Private Ltd (TKMP) Wednesday scaled up its expansion plans to roll out 310,000 cars by 2013 in two phases at a total outlay of Rs.1,173 crore.

In order to increase local sourcing of components, group company Toyota Kirloskar Auto Parts Private Ltd (TKAP) also announced setting up of aluminium casting and machining lines at an outlay of Rs.750 crore to be ready by early 2014.

“In line with the growing demand for our vehicles, we have decided to further expand production. The demand for Etios and Etios Liva has been encouraging and we are gearing up to cater to a larger number of customers,” said TKMP managing director Hiroshi Nakagawa.

TKMP has two plants near Bangalore in Karnataka, one of which manufactures Innova, Fortuner and Corolla Altis models. The second plant rolls out Etios and Etios Liva models.

The first phase of expansion, by the first half of 2012, will increase production capacity from 150,000 units to 210,000 units at an investment of Rs.275 crore, the company had said earlier.

By 2012, the capacity of the first plant will be 90,000 units and that of the second plant 120,000 units, up from 80,000 units each respectively. The production of Corolla Altis will be shifted to second plant by then.

In the next phase of expansion to be concluded by 2013, Toyota Kirloskar will increase the total capacity by 100,000 units to 310,000. The first plant’s capacity will go up to 100,000 units and that of the second plant to 210,000 units. The outlay for the second phase is put at Rs.898 crore.

Elaborating on the rationale for expansion, TKMP deputy managing director Shekar Viswanathan told IANS over phone from Bangalore: “The Indian economy is growing at eight percent and no other economy is logging such growth. There may be short-term problems in the guise of interest rate hike owing to inflationary pressures. But in the long term, the market is good.”

He said the company is fully utilising its current capacity and the additional capacity is needed to meet future growth.

“It has been our experience that during the initial phase of any product launch, the customers are a bit cautious. But once it starts picking up, the plant capacity becomes insufficient,” Viswanathan said.

According to him, the company is also planning to export its cars.

“Exports for us with be small but not insignificant,” he added.

Meanwhile, TKAP is expected to commission its 240,000 per annum units transmission plant early 2013 and the 100,000 units petrol engine plant during the third quarter of 2012.

Both the projects involve an outlay of Rs.500 crore.

According to the company, exports of transmission systems are also being planned.

Currently, TKAP serves as a production and supply base for manual transmission for Innova model made in India, Thailand and Argentina.