Toyota Motor Corporation (TMC) has held a groundbreaking ceremony to mark the beginning of construction of a new plant of Toyota Kirloskar Auto Parts (TKAP), TMC’s joint venture auto-parts manufacturing company.

At the plant, TKAP plans to produce approximately 100,000 engines per year starting in 2012 and approximately 240,000 transmissions per year starting in early 2013, increasing local content of the made-in-India Etios compact car. Production represents an investment of approximately nine billion yen and about 500 new jobs. The production of engines and transmissions for the Etios will enhance the production and supply base position of TKAP, which currently produces manual transmissions for the Innovative International Multi-purpose Vehicle (IMV) Project.

As a part of its sustainable growth strategy, TMC intends to increase local production in line with expansion in emerging markets. The company will also hire more staff in conjunction with the start-up of the new plant.

Toyota Kirloskar Motors launched the Etios in December 2010 and within the first week received over 12,000 bookings. The Etios which debuted at Rs 4.96 lakh ex-showroom Delhi will take on the Manza, Dzire and the Logan.

Meanwhile, TKM is gearing up for the launch of the Etios Liva which is scheduled to debut in April. Deliveries of the Etios began in January and an estimated 1,651 units were sold. With a long waiting period, it remains to be seen how long passengers will wait for the Etios. The company had apparently told its customers that their wait could well extend to August.

In September, Honda will launch its own compact, Brio. In the meanwhile, Maruti Suzuki is gearing up to take on the Etios and will launch a Dzire model that will be under four metres thus enabling the manufacturer to benefit for the 10 percent excise tax for this category.