Toyota Indias main product is the Etios built in hatchback, saloon and crossover forms. Export markets include South Africa

Toyota India's main product is the Etios built in hatchback, saloon and crossover forms. Export markets include South Africa

Toyota believes it will hit full capacity of around 300,000 vehicles annually within two years at its plant in Karnatakain thanks to growing demand.

Shekar Viswanathan, vice-chairman of Toyota Kirloskar Motor, told The Hindu Business Linethe company is currently manufacturing about 150,000 units a year.

He added: "We are working to utilise full capacity within two years as we see demand rising both in India and overseas."

He added that although the automotive sector is still passing through a tough business cycle, there are indications that this would improve in the second half this year and accelerate over the next few years.

The auto industry will play a big role in the expansion of India’s manufacturing sector, whose contribution to the GDP is poised to grow from 16% to 25% over the next few years, Viswanathan said. The country’s automotive sector, which now has an annual demand of about 2.7m units, is projected to grow to about 6.5m by 2020.

One challenge for the industry, he said, is finding people with the right skills and Toyota in India is engaged with 36 industrial institutes helping with training in areas related to the automotive sector.

According to industry data, the country’s automotive industry employs about 29m people and is expected to go up to 34m by 2016 and possibly 100m both direct and indirect by 2026.