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Toyota Kirloskar scales down production by 30 per cent in December news
16 December 2008

New Delhi: Toyota Kirloskar Motor is scaling down production by 30 per cent during the current month due to declining sales of passenger cars but will go ahead with planned investments of Rs3,200 crore in India.

The company regsitered a fall of 48.55 per cent  in sales in November this year at 2,087 units compared with 4,056 units in the same month last year.

The company indicated that it may have to resort to similar cuts even next year if the current market situation persists.

Hiroshi Nakagawa, managing director, Toyota Kirloskar Motor said he expected the first six months of 2009 to continue to remain challenging and may improve after that.

The company has the capacity to produce over 5,000 units a month at its plant near Bangalore.

Nakadawa told the press that all over the world except in India Toyota Motor has put on hold all investments for expansion. He said the company's latest challenge in India is to reach last year's sales volume. The company had announced a sales target of 60,000 units for 2008 having sold 54,181 cars in 2007 in India.

However, Nakagawa said the company's second unit in Bangalore at an investment of Rs 3,200 crore was on track and Toyota will roll out the ''strategic'' small car from the new facility by 2010.

Toyota Motor Corp. has decided not to go ahead with increasing production capacity in India as well as in Brazil. The company intended to increase its capacity in India tenfold to an additional 60,000 units by 2015. India is Asia's fourth largest car market where Toyota still has to capture a larger market share and make its presence felt in a bigger manner.

Toyota Kirloskar Motor Private Ltd has its plant in Bidadi near Bangalore. Its second plant was scheduled to begin operation in 2010, with an annual capacity of 100,000 passenger vehicles.

Toyota Motor Corp has postponed all large capital investments and eliminated executive bonuses due to the ongoing credit crisis, slump in the auto sales around the world and continued appreciation of yen. The company has already delayed the launch of its hybrid model, Toyota Prius, in India and has attributed the delay to non-supportive infrastructure, steep duty structure and non-competitive price tag.

The postponements by Toyota are likely to hurt the auto component suppliers and car material makers. Other car makers are expected now to follow suit cut down on their capital spending also.

The company is also planning to launch the CNG version of its utility vehicle 'Innova' in India and hopes to have the car on road by the end of January, 2009.

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Toyota Kirloskar scales down production by 30 per cent in December