The plant's completion became uncertain due to the economic crisis, but according to managing director Hiroshi Nakagawa, despite the price increase for materials, Toyota managed to keep things under control.
“Construction costs as well as raw material prices have increased in the past few years due to the hike in petroleum prices, we remain committed to our investment in the Indian plant,” Nakagawa told just-auto.com.
“We tried to control the cost by implementing ‘Kaizan’ and we have been successful to a great extent. The second plant will commence production on schedule in December 2010.”
Currently, the Japanese manufacturer produces around 80,000 units of the aforementioned models each year. The new facility, which will cost Toyota $677 million, will increase that capacity by 70,000 units in the early months of operation.
The opening of the plant will take place roughly at about the same time the global launch of the Etios. Toyota will initially launch the hatchback version of the model and then move to the sedan.
Earlier this year, Toyota decided, thanks to the booming demand in India, to import and sell its Prius hybrid in the country. The Prius is the first Toyota hybrid to sell in India and entered the market against the other existing hybrid in India, the Honda Civic Hybrid.