BANGALORE -- Toyota Motor Corp. formally opened a fourth gearbox plant in India on Tuesday -- bringing India's near $7 billion auto parts industry closer to global markets.
The Toyota Kirloskar Auto Parts plant will turn out 160,000 manual transmission gearboxes a year for its Japanese parent's multi-utility vehicles to be assembled in South America, South Africa and around Asia.
"India has the potential to become a global competitor among the top tier-one suppliers," Akio Toyoda, senior managing director at Toyota, said in a statement.
He said Toyota had chosen India for its competitive cost, engineering talent, strong machine tool industry, existence of reliable tier-two and tier-three suppliers and the success of the Japanese firm's other local joint ventures.
By virtue of its scale and the fact that it will be the sole supplier to several assembly plants, Toyota Kirloskar's gearbox operations represent a significant advance in integrating Indian auto component manufacturing with world markets.
For Toyota, the plant's success would support its plan to source components outside Japan by consolidating the production of individual parts in specific countries.
"India, without doubt, occupies an extremely important position (in this plan)," Toyoda said at the inauguration of the plant outside Bangalore.
Indian auto part makers have attracted global attention, with big foreign companies such as Delphi Corp., Ford Motor Co. and DaimlerChrysler AG, looking to them as supply sources.
Bharat Forge Ltd., based southeast of India's financial hub of Bombay, is already the world's second-largest maker of forged vehicle components, with exports accounting for nearly three-quarters of its sales.
The whole sector's exports are estimated to have crossed the $1 billion mark in the fiscal year to March 2004, a jump of nearly a third and 15 percent of the sector's $6.73 billion turnover. Exports are expected to more than double by 2010.
Toyota chose to build its fourth gearbox plant on 50 acres of lush farmland outside India's technology hub of Bangalore over Thailand and the Philippines, officials have said.
Vikram Kirloskar, owner of 10 percent of unlisted Toyota Kirloskar, said the plant was already operational and would hit full capacity by March. Investment in the plant so far totals 2.5 billion rupees ($54 million).
The plant will become the main supplier of a specific transmission for Toyota worldwide and so will be a test for the Indian sector's supply chain and the country's infrastructure as to whether they can meet stringent quality standards and deadlines, Kirloskar said.
Toyota already makes its Qualis utility vehicle and the popular Corolla sedan outside Bangalore through its unlisted joint venture Toyota Kirloskar Motor Pvt. Ltd., which has a domestic market share of about 5 percent.
Toyota plans to boost production capacity for the two models by a third to 60,000 cars by the next fiscal year, with sales expected to be much higher.