Siam vice-president Vikram S. Kirloskar in New Delhi on Thursday. (PTI)
New Delhi, Sept. 6: Car makers are planning to breathe life into the sagging domestic market by stepping up investments to boost capacity and offering new products.
While Japan’s Toyota Motor will invest Rs 900 crore to raise capacity by 50 per cent at its two Indian facilities, Germany’s Volkswagen is looking to shovel in over Rs 700 crore to upgrade products and facilities.
Mahindra & Mahindra (M&M) will introduce the Quanto — its smallest sports-utility vehicle — later this month and is gearing up to launch the Rexton SUV before Diwali. Tata Motors is reportedly working on three products with an emphasis on a car that will bridge the gap between the Nano and Indica.
These developments come at a time car sales have moderated because of a slow economic growth, rising fuel prices and high interest rates.
Sales grew 10 per cent to 865,603 units between April and July compared with the same period of 2011, according to the Society of Indian Automobile Manufacturers (Siam). It is much slower than the 30 per cent growth in recent years.
Most car makers expect the upcoming festive season, starting from October, to revive sales.
“India has a huge potential and we want to make sure that we serve this market well,” said Vikram Kirloskar, vice-chairman of Toyota Kirloskar Motor.
Toyota plans to increase capacity to 3.1 lakh vehicles a year from 2.1 lakh by March 2013 at its Bangalore facilities.
Volkswagen will spend on improving production efficiencies to achieve a 10-12 per cent growth in sales this year from 1.11 lakh units last year.
“We are investing about 100 million euros (Rs 700 crore) for the entire group in the next two years in India,” said John Chacko, chief representative of the group in India.
M&M expects its Quanto to sell 2,000 units per month. “Initially, we expect higher orders for the Quanto, but it should stabilise at 1,500-2,000 per month,” Pawan Goenka, president of M&M’s automotive business, said.