Toyota Kirloskar Motor (TKML), the Indian unit of Japan's Toyota Motor Corp (TMC), is to invest an additional INR8Bn (US$164.8m) in the company's second manufacturing facility near Bangalore, for completion by 2016.

According to the state of Karnataka's minister for large and medium scale industries, Murugesh Nirani, the regional government approached TMC in Japan with an incentive package that included several concessions before the company agreed to increase the investment in the Bidadi plant (40km/25 miles from Bangalore).

The state lost its new Tata Nano plant last year after violent farmers' protests forced the automaker to abandon the all but completed facility and relocate it to a more benign location in another state.

A three year tax rebate of up to INR800m once production commences is part of the incentive package.

The company initially had planned to invest INR 32Bn in the second plant at the Bidadi site near Bangalore which will produce a small car for India by 2010.

The additional INR8bn will be used in the 2011-2016 period. TKML invested INR17bn in its first factory in 1997 which has annual capacity of 60,000 units.

Its total investment here by 2016 will total INR57bn and the second factory will have an annual capacity of 100,000 units. The new plant is expected to create 2,000 jobs.

Kevin Jacobs