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Toyota Plans to make India its Small Car hub

By Motortrend India Staff   |   24 August,2009

Toyota Motors Corporation, World’s largest car manufacturer has planned to utilise the proposed Indo-Thai free trade agreement (FTA) to make India a hub for small cars to be exported to its global markets. A few auto-parts already enjoy duty free status but the Indo-Thai FTA that is currently under negotiations will make most auto-parts used by Toyota and other car makers duty free..

Toyota imports critical spares such as the engine for its Innova and Corolla Altis from Thailand. The 80 percent of the spares in its Fortuner SUV, assembled at its Bangalore unit are imported.

Its top-end vehicles Camry sedan, Prado and Land Cruiser SUV are imported to India. But the company plans to use FTA with Thailand that will allow it to import auto-parts at zero duty when it comes into effect against the 7-10 per cent duty it now pays to assemble cars here.

“We are looking at all options to make India the manufacturing base for TMC’s global operations. Our Indian operations will see a major change once we launch our small car next year,” TMC’s senior MD Dato’ Akira Okabe said. He also said that although Toyota is the world’s largest car maker, it cannot have manufacturing facilities worldwide.

Toyota has earmarked Rs 3,200 crore for 2008-11 to set up a second plant in Bangalore to make 2-lakh cars from the current 80,000 units. Toyota’s small car, scheduled for launch next year, would be exported to the overseas market to increase profitability. “Global profits of TMC is miserable but the Indian operations is quite profitable,” TKM MD Hiroshi Nakagawa said.

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