Toyota Motor plans to enter the low-price car market in India, building its second plant in the country, as it challenges rivals Suzuki Motor and Tata Motors. ( Reuters )
Toyota's 35 billion yen ($343 million) new production facility will make a new low-priced compact car, in addition to the Corolla. The compact car will also likely be exported to other countries in the future, Japan's largest auto maker said in a statement.
The battle to win India's millions of cost-conscious consumers has heated up since Tata unveiled plans earlier this year to launch the world's cheapest car, the Nano, at around half the cost of the current cheapest Indian model from Suzuki's unit Maruti.
Analysts expect the new Toyota cars to have a price tag of around 700,000 yen to 800,000 yen ($6,900-$7,850).
"That will not immediately compete with Tata Motor's $2,500 people's cars, though in the future Toyota may jump into the lower-priced car market using Daihatsu's know-how," said Yasuaki Iwamoto, analyst at Okasan Securities.
Toyota's unit Daihatsu Motor specialises in production of small cars and commercial vehicles.
Global car makers - initially sceptical that Tata could produce such a low-cost car - are now scurrying to make cheaper cars available, aiming to meet the needs of consumers not just in India, but also in emerging economies like China and Russia.
General Motors said last month it wants to launch a second small car in India that would be priced cheaper than its current model, the Chevrolet Spark which sells for around Rs300,000 ($7,500) although it would not compete directly with the Nano.
Nissan Motor and partner Renault aim to build a $3,000 car with Bajaj Auto.