Economic times article (today) Toyota may split India operations- Automobiles-Auto-News By Industry-News-The Economic Times
Toyota may split India operations
BANGALORE/MUMBAI: Japanese auto giant Toyota Motor Corporation may carve its Indian arm into two units — one solely handling manufacturing and the other focused on marketing, distribution and sales — as it recasts strategy to boost its presence in the domestic market. Sources said Toyota’s top brass, who have identified India as a key market, are working on a restructuring plan that may include bifurcation of Toyota Kirloskar Motor (TKM) operations as a prelude to its bigger ambitions in the country.
The development comes even as TKM deputy-managing director KK Swamy put in his papers on Monday. Mr Swamy was involved with TKM since 1996 when the Japanese giant floated the joint venture with Kirloskar to set up its Indian operations. He headed many functions covering finance, marketing and corporate planning, but his role has been limited in the recent past.
Mr Swamy confirmed he was moving out of the company. Unconfirmed reports said he may be headed to a rival car company, possibly Volkswagen, but Mr Swamy only said he has many options and would take a call after a break. As per rumours, he may also turn into an entrepreneur in the manufacturing sector.
It is not clear if Mr Swamy’s exit is linked to the restructuring plan, even as he described the parting of ways as “amicable”. However, it is not clear if there is a timeframe to effect the restructing plan. When contacted, the company spokesperson said he was not aware of any corporate restructing plan.
It is believed that Toyota management was attempting to replicate in India its Indonesian business model, where it has separate structures for manufacturing and marketing. Sources said that marketing, distribution and sales functions were likely to be consolidated as a new unit headquartered in Gurgaon while Bangalore will be developed as the manufacturing hub. The restructuring also comes in the context of reports that India may be the mother hub for its “new strategic small car manufacturing” globally.
In March, Toyota said it would invest $300 million to build a second manufacturing plant in Bangalore to roll out a small car. The existing plant at Bidadi near Bangalore makes Innova and Corolla. Toyota has scrapped plans for a small car on the Yaris platform and is instead developing a whole new car for India, which is currently on the drawing board. |