Toyota Etios to get locally made engines & transmissions

Toyota Kirloskar Motors (TKM) India is betting big on its upcoming Etios hatchback. Toyota has developed the Etios exclusively for the Indian market and which would come in both hatchback and sedan versions and would be launched by the end of 2010.

Toyota Kirloskar Auto Parts Pvt Ltd (TKAP) a subsidiary of Toyota is setting up a new engine and transmission plant in Bangalore with an investment of 500 crore Rupees to manufacture powertrains for the Toyota Etios.

The plant would take 24-30 months to be commissioned and till then the Etios would get imported engines and transmissions. This means when the Toyota Etios is launched by the end of the year it would sport imported engines and transmissions.

Sandeep Singh, Deputy Managing Director, TKM -

The new plant will aggressively push up the localisation content. The cost savings would be the import duty (around 7.5%) and the logistic expense. However, since the volume is not too high, the savings may not be too high. But there will be some savings.

The plant would produce 1,00,000 powertrain units annually of which 70,000 would be fitted on the Toyota Etios for the domestic market while the remaining 30,000 would be exported to Toyota's plants in Thailand and Argentina.

Hiroshi Nakagawa, MD, TKM -

We are setting up the second engine plant with an installed capacity of 100,000 units per annum for our Etios compact car, which will enter the Indian market in December.

Having locally made powertrains and transmissions would help Toyota India price the Etios hatchback competitively and the Etios should battle it out against the Nissan Micra, Ford Figo, VW Polo, the soon to be launched next generation 2011 Maruti Suzuki Swift and the upcoming Honda small car for India.

Source: DNA