Toyota on the Race With Small Car Selling in India

by : Evander Klum

India is Asia's fourth largest car market. In a report by, it seems that the market is about to get bigger with the world's biggest automakers trooping over, lead by Toyota which is reportedly planning to dominate India's auto industry, and rivals Honda, GM, and Volkswagen on the same track.

Included in the report is the interview with Toyota's Chairman Fujio Cho who was quoted saying, "We are thinking about several countries to make the new car; India may be the first,'' There were no further elaboration made by Toyota's chairman, however we can sense that Toyota is on its expansion plan.

By selling five hatchback models, Suzuki's local unit, Maruti Udyog Ltd. has a 50 percent share of the 1 million car unit per year of India. Along with Honda Motor Co. and Nissan Motor Co., Toyota plans to sell small hatchbacks to tap a segment that comprises three-quarters of all the vehicles sold in the South Asian nation.

"For Toyota to continue increasing profit, it needs to expand in markets like India,'' said Ichiro Takamatsu, a chief investment officer at Alphex Investments Co. in Tokyo.

"There is enough room for Toyota and other companies to share the growth in India, as more people will be able to buy cars.'' he added.

To put their plan into action, Toyota Motors is also planning to build a new factory in India to add to the one in Bangalore City, said Mr. Cho.

On the other hand, Honda Motors, Japan's second largest car maker is also targeting a double production capacity of its plant in India to 100,000 by the end of the year. Another factory will be opened sometime in 2009 that will offer more variety of car models and segments including small cars.

Also in the race is the world's biggest auto maker, GM (maker of original ) that already started their sales of their first mini car in India last April.

The European Volkswagen is also working on the introduction of a hatchback on the Polo model by 2009.

Suzuki's local unit, the Maruti Udyog will be changing its name to Maruti Suzuki India Ltd. With this change, the company plans to raise its production capacity to 960,000 cars by the end of March 2010. This is a part of their 1 trillion yen ($8.7 billion) five-year global expansion program.

With a lot of large car industries planning to enter the Indian Auto market, the annual car sales India is expected to triple to three million in 2015 according to government estimates.