Toyota India is eyeing substituting imports with locally made engines and transmissions.

Local joint venture Toyota Kirloskar Motor may set up the new plant at its planned second factory in Bangalore.

"In order to localise production (more), in future I am very keen to set up a transmission and engine unit in the second plant," Toyota Kirloskar Motor (TKM) managing director Hiroshi Nakagawa told Press Trust of India on the sidelines of a conference.

TKM's second car plant will have an initial capacity of 70,000 units when it launches a new small car designed for India by early 2011 but the firm may increase capacity to 200,000 units if there is sufficient demand.

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