Toyota Kirloskar set to celebrate a milestone

By Our Special Correspondent

BANGALORE, DEC. 20. Toyota Motor Corporation of Japan, which has teamed up with the Kirloskar group to manufacture automobiles in India, is all set to celebrate an important milestone in the second week of January. Toyota Kirloskar Motor (TKM) is a joint venture between TMC with 88.86 per cent equity and the Kirloskar group (11.14 per cent).

The investments so far have been in the region of $170 million.

Toyota chose an unique route of a multi-product vehicle (MPV) instead of a passenger car. Its first offering, Qualis, is completing the first year of the launch with an impressive sales of 20,000 plus vehicles. Mr. K. K. Swamy, Deputy Managing Director of the company, told The Hindu, that the company had not only exceeded the current year's budget, but also hopeful of meeting the target of 35,000 vehicles set for next year.

TKM has also been adopting a low profile. However, the acceptance of the Qualis has not been in doubt. The company that has been ramping up production to meet the sizable demand has been recording steady and increasing sales in the last six months. According to Mr. Swamy, the breakeven would be reached at a sales level of 40,000 plus vehicles which is expected in the third year. The carry forward losses will be liquidated by the sixth year after commercial production.

Further investments in the auto plant which is located at the Bidadi industrial area near Bangalore, will depend on the new auto policy that is to be announced shortly. There is a lot of speculation as to when Toyota would start producing regular passenger cars for the Indian market. But for that to happen, the existing production facilities comprising press shop, assembly lines, paint shop and so on need to be augmented considerably. However, the company has enough land to accommodate the future expansion.

According to Mr. Swamy, the Qualis' acceptance is mainly due to the price value equation that the company has correctly arrived at. It is also due to a large measure of indigenisation. According to company sources, 69 per cent of the MPV has been indigenised. To support the indigenisation programme, the company has helped create a techno-park close to its production facility. In keeping with Toyota's formidable skills in engineering and inventory management, TKM has also inculcated these practices among its suppliers and the results as far as the production of Qualis is concerned have been extremely impressive. Incidentally, The ``Touch and Try'' offer that the company introduced as a sop in the first year will be withdrawn. The price of Qualis in all its variants will go up soon. Mr. Swamy also pointed out that whatever that can be localised had already been localised and this again was a basic tenet of Toyota's philosophy. The joint venture imports engines and transmission systems from Thailand and the Philippines.

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