Toyota Kirloskar Motors is planning to set up a second vehicle manufacturing plant in India. The new plant will likely be located in the northern part of the country and the states of Uttaranchal and Himachal Pradesh are seen as frontrunners for the new plant.

Both states are offering tax breaks, have good labour resources and infrastructure and offer proximity to the market centre of New Delhi.

The existing Toyota Kirloskar plant in Bidadi near Bangalore in South India has a capacity of 60,000 units. The plant manufactures the Toyota Innova MUV and assembles the Corolla and Camry saloons. It is running at full capacity following a good market response to the recently launched Innova.

Toyota Kirloskar is looking to enter the volume small car segment and the recently launched Aygo is one of the cars that the company may be looking at introducing in India.

Alternatively, Toyota may enter the Indian small car market through Daihatsu.

Toyota is planning to capture 10% of the forecasted two million units passenger vehicle market in India by 2010. Toyota's current market share in India is less than 5%.

Deepesh Rathore / Tilak Swarup