The R&D centre will help the automaker develop more India centric products and parts, while a hatchback positioned below the Etios Liva cannot be ruled out either.

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Toyota plans to set-up new R&D centre in India that could spawn a new hatchback

Despite being an early entrant in the Indian auto market, Toyota Kirloskar Motor (TKM) could not manage to capitalize from its presence like other global competitors have. In more recent times, Toyota’s market share has gone down further with mass market products like Etios and Liva failing to live up to the company’s expectations. With competitors making the most of India as a global manufacturing hub; the Japanese automaker plans to set-up a local R&D centre that could spawn a new hatchback and localized parts in one of the fastest growing markets in the world.

Toyota plans to set-up a local R&D centre that will help increase the local supplier capability in the next 3-5 years. Localized parts also mean more affordable spares, while the the models itself would be more affordable. The R&D centre could also spawn a new hatchback below the Etios Liva where the company has no presence as yet. A necessity for Toyota India, a final decision on the R&D centre is yet to be taken by the head honcho’s at Toyota. The company stated that the bosses at the Japan headquarters need to overcome the mental and physical barriers in regard to its Indian operations in order to reap long-term benefits.

The company has a strong market share of 50-60 percent in the Rs. 12 lakh plus range with products like the Corolla and Innova, which accounts for just 10 percent of the entire market. The sub Rs. 7 lakh space on the other hand constitutes for 70-80 percent of market share and that is where the Japanese automaker is falling back on. The company further stated that its newest launch the Etios Cross has been doing better than its expectations, averaging 1500 units per month.

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Toyota also sees the potential in India to become a global manufacturing hub