TKM, a joint venture between Toyota Motors and Kirloskar in India, plans to introduce its financing arm in the country to boost its sales. Auto makers in India and around the world are facing slump in their sales owing to the ongoing credit crisis. There has been a dearth of liquidity in the market and the banks have cut down on their lending. Thus, the company has undertaken a feasibility study to assess the requirement of its financing division in India.
“The difficulty in accessing bank loans too has contributed to the slowdown in vehicles sales during the last six months. This is why we are conducting a feasibility study for setting up own financing unit,” Mr Hiroshi Nakagawa, Managing Director, Toyota Kirloskar Motor, said. "Automobile sales had declined 30 per cent during the second half of the current year and had impacted Toyota operations as well. I expect the slowdown to continue into 2009 at least for a couple of months,” he added.
The company plans to set up its second manufacturing unit in Bangalore and also intends to invest $68 million in the next two years. After the completion of the second plant, the total production capacity shall increase to 2.6 lakh by 2010 from its current capacity of 60,000 units.
