Toyota Delays Plans for India

author image Rishi
Monday 15 December 2008, 00:00 AM

Toyota Motor Corp. has postponed increasing its production capacity in India as well as in Brazil. The company intended to increase its capacity in India tenfold to an additional 60,000 units by 2015. India is Asia’s fourth largest car market where Toyota still has to capture a larger market share and make its presence felt in a bigger manner.

Toyota Kirloskar Motor Private Limited has its plant in Bidadi near Bangalore. Its second plant was scheduled to begin operation in 2010, with an annual capacity of 100,000 passenger vehicles.

Toyota Motor Corp has postponed its large capital investments and eliminated executive bonuses due to the ongoing credit crisis, slump in the auto sales around the world and continued appreciation of yen. The company has already delayed the launch of its hybrid model, Toyota Prius, in India. The delay in the launch is attributed to non-supportive infrastructure, steep duty structure and non-competitive price tag.

The postponements by Toyota are likely to hurt the auto component suppliers and car material makers. It is widely speculated that other car makers may follow the lead and cut down on their capital spending too.

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