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07. May 2009

IN - Slowdown signs - Toyota cutting costs for second plant near Bangalore

It is reported that as a result of a string of cost reduction measures being undertaken by the world's biggest carmaker Toyota announced investment of INR 3,200 crore, for rolling out a strategic small car in India by 2010, would possibly be reduced.

The likely reduction in Toyota's investment amount also results from the drop in the prices of raw materials especially steel.

Toyota Kirloskar Motor Toyota's joint venture with Kirloskar Group in India will be producing the small car at its forthcoming second plant, under construction near its already-operational Bangalore unit. The company is also said to be working on an export plan beyond the small car.

Speaking about some of Toyota's imminent moves, Mr Hiroshi Nakagawa MD said that "We are continuously working on reducing cost by bringing in lots of value engineering for rolling out the small car. I hope the investment will come down and I am sure it will."

However Nakagawa refrained from disclosing by how much amount the announced INR 3,200 crore investments would be lowered.

Mr Sandeep Singh deputy MD of Toyota said that "We had cut production anticipating the market will not do well. But we do see the market rebounding. So we will take our production to 5,000 units by July from the present 3,000 units."

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