Toyota Motor Corp. (TM) plans to increase its annual production capacity in India to 210,000 vehicles from 150,000 in the first half of 2012 in order to meet rising demand for its newly launched sedan, Etios. The expansion would require an investment of about ¥4.9 billion ($60.9 million).
Etios, launched in December last year, has been developed solely for the Indian market by Toyota Kirloskar – the joint venture between the Japanese carmaker and the Indian Kirloskar group. Recently, the joint venture launched the hatchback version of the vehicle, Etios Liva.
The vehicle is manufactured in Bangalore, Karnataka. Toyota expects to sell more than 100,000 units of Etios and hatchbacks in 2012. It also plans to use the engineering platform of the vehicle for cars that will be sold in Brazil in the future.
Toyota is banking on the emerging markets such as India for its sales growth. In 2010, auto sales in the country surged 30% driven by demand generated mainly by the middle class.
However, rising interest rates are forcing consumers to cut back its big-ticket purchases as they mostly rely on bank loans. As a result, car sales in India saw a meager rise of 7% to 158,817 units in May, the slowest pace of growth in two years.
Recently, Toyota released its guidance for the fiscal year ended March 31, 2012. The company expects the full year profit to fall 31% to ¥280 billion ($3.5 billion) from ¥408 billion a year ago driven by lower sales on the back of earthquake and tsunami in Japan and stronger yen.
The Zacks #3 Rank (Hold) company has projected global sales to decrease to 7.24 million vehicles from 7.31 million vehicles in fiscal 2011, which will reduce earnings by ¥120 billion. The automaker revealed strong yen will reduce the yearly profit by ¥100 billion.
Toyota’s home country rival Honda Motor Co. (HMC) expects a stark 63.5% drop in profit to ¥195 billion ($2.4 billion) for the fiscal year from ¥534 billion recorded in the previous fiscal year due the disaster in Japan.
Meanwhile, Nissan Motor Co. (NSANY) revealed that it expects a 15.4% fall in profit to ¥270 billion ($3.4 billion) due to the same reason. It also anticipates a 14.4% dip in operating profit to ¥460 billion ($5.73 billion) during the year.
HONDA MOTOR (HMC): Free Stock Analysis Report
NISSAN ADR (NSANY): Free Stock Analysis Report
Be the first to comment