Toyota along with other top auto manufacturers aims to enhance its expansion investment capacity with an initial investment of Rs 11,000 crores in India. This is a profitable move by Toyota considering the recent downslide in car economy. At present major auto firms operate at 60-65% efficiency, the market has to increase to a higher level to have better revenue turnovers for expansion.

The sales had declined by 7% during the 2012-2013 financial year, which is the most unfavorable economic scenario in ten tears. To combat this undesirable turnover, major auto firms have profitable measures such as special launches, discounts, free accessories and so on. Toyota along with other auto biggies such as Honda, Maruti Suzuki, Renault, Ford, Nissan are vouching for the car economy to pick up and have constructed plants for 1 million models which accounts for less than quarter of total market volume.

Indian subsidiary of Toyota, Toyota Kirloskar Motor is vouching on export and domestic markets. If the growth in financial year of 2011-2012 was 2%, the potential to expand car volumes and sales will be a herculean task. Companies could also introduce 10 to 15 launches to boost sales. According to Deepesh Rathore, the Managing Director in the consulting segment in the Indian Health Service Automotive said, ‘’every auto manufacturer has to have its own plan to boost sales, and to introduce new models and expand its portfolio, and focus on long term strategies quickly. ‘’

According to the chairman of Maruti Suzuki, Bhargava R.C, ‘’our aim for expansion is dependent on future prospective, the company at present aims to invest a huge amount of Rs 1,700 crore to expand its car capacity portfolio to 250,000 volumes. Car companies should aim at a 10% growth this year.’’ On acquiring capacity expansion he said,’’ The manufacture of new models is dependent on the current market scene, suppose the market continues to remain stagnant, it will hinder the high cost required for manufacturing vehicles.’’

There have been highs and lows in demand for cars, and auto manufacturers are still manufacturing cars even with the fluctuation in consumer demands which is a risk. Experts are positive on the progress of car economy in the India and overseas markets. The auto market may witness profits in the near future, but the position of auto firms in the future is still unknown, we will have to wait and watch weather the economy picks up in the future.

The aim of Toyota and other powerful auto manufacturers to aim for a 11,000 crore capacity expansion is a good move, considering the present slump in car sales. Many car companies have introduced methods to increase sales such as discounts, freebies and so on. Few companies have even rolled out cars with exciting holiday packages. It is a confusing period for auto firms, due to the uncertainties in economic conditions, most firms are banking on new models to heighten sales which is a risk. It also depends on consumer’s employment status, during this recession period.

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