Indian Autos blog

Thursday, April 17, 2008

Toyota may import engines for its small car from Asean countries

It seems like Toyota will import engines from Asean countries Thailand and Indonesia, to avail the benefits of the free trade agreement, which the govt is likely to sign shortly. A free trade agreement between countries allow them to import and export products free of any taxes. Toyota is presently developing a small car for both the Indian and overseas markets which it plans to launch by 2010. Toyota will invest Rs 1,400 crore in building a new plant from which this new car will roll out of.

Both Thailand and Indonesia have plants which produce engines. Though Toyota is looking at localizing majority of the components, the engine and transmission would most likely be imported from the existing plants in those two countries. Moreover the investment on making engines locally is pointless when imported ones are not going to be taxed which again will depend on the fate of the free trade agreement.

Toyota has a meager market share of 3.6% in the passenger vehicle market here in India. The have been very successful selling all their models right from the Qualis. With increase in production, Toyota hopes to churn out 600,000 units by 2015 compared to the current statistic of about 55,000 units. 15% share is what they have in mind as far as India is concerned and it is only a matter of time before they accomplish this feat with substantial help from its small car sales figures. Over two-thirds of the cars sold in India are small cars. Every car manufacturer including Renault, Ford, Hyundai and Fiat are developing their own small cars cheaper than anything else in their product range for the Indian market. Some of them are trying to pitch in one from their International lineup to join the party. All of this goes to show that India is maturing into a prime hub for small cars.