Thursday, March 18, 2004
Toyota says may export cars from India in future
Reuters Tokyo, March 18
Toyota Motor Corp could export Indian-made vehicles if it manages to use its expertise to produce cars more cheaply there than elsewhere in the world, an official at the world's number two auto maker said on Thursday.
"One of my missions is to use Toyota's know-how and culture of cost-cutting to turn India into our lowest-cost manufacturing centre in the world," said managing officer in charge of Asia, Oceania and Middle East operations, Akira Okabe.
"It would be wonderful if we could begin from the development stage and utilise India's many resources to achieve this," he told Reuters in an interview.
With sales of just 40,500 units last year, Toyota is still a small force in the fast-growing Indian market dominated by Maruti Udyog, held 54.2 per cent by Suzuki Motor Corp. Toyota ranks fifth in sales volume, with a four per cent share.
But Okabe, an India-enthusiast who first visited the country in the 1970s as a student to climb the Himalayas, said the world's second most populous nation had the potential to play an important role for Toyota in the region, or even globally.
Included in his long list of India's enticing features were its political and economic stability, big population, high-quality labour and the existence of a mature parts industry that makes manufacturing cheaper than in most other countries.
"It's not just the parts and raw materials, but also the machinery that can be procured locally, and that's a huge plus.
"Down the road, we will have to look at how to bring (India's strength) to the regional or global level," Okabe said.
Toyota already has plans to use India as a supply base for manual transmissions as part of a global vehicle and parts supply chain project, dubbed the "IMV Project", to kick off this year.
Okabe said that could be extended to vehicles too, although he did not specify a time frame, destinations or models.
While he conceded it would be difficult to export cars to Japan, mainly due to concerns about how they will be received in a market with so much competition, one possibility would be to compete with Korean cars in various markets, he said.
For now, Okabe has other targets to keep him busy.
By 2010, he wants Toyota to control 10 per cent of the Indian car market, which would mean 200,000 cars, given his estimate that the market would be well over two million units by then, or double last year's figure.
That would signify a fivefold jump in Toyota's sales over the next six years, and would require a dramatic boost in local production volumes, Okabe said.
Toyota's Indian sales jumped 64 per cent last year, but fell 14 per cent the year before despite an expansion in the overall market as production was temporarily halted by a labour strike at its local factory.
"Strikes are a big issue," Okabe said, recalling that the third word he learned in India after 'hello' and 'thank you' was the Hindi word for 'hurray', a word he heard often from striking workers.
"But I'm optimistic that the situation will improve as the government helps to get the people to understand how counter-effective it is."
© Hindustan Times Ltd. 2004.