Toyota Kirloskar said on Tuesday that it will launch its small car by the end of 2010, by when its plant in Bangalore is expected to be ready. The initial capacity has been set at 70,000 cars a year.

The second Indian plant is being built at a cost of about Rs3,000 crore in Karnataka, where its first plant is also located, said Sandeep Singh, a deputy managing director at Toyota Kirloskar Motor India Pvt Ltd.

The compact car will be made specifically for the Indian market, Singh said at the Indian launch of Toyota's popular Land Cruiser sports utility vehicle in Mumbai.

Japan's Toyota Motor Co, which owns 89 per cent of the Indian venture, had planned to start the second plant with annual capacity of 100,000 units, but this had been scaled down because of the downturn in the auto sector. ''The demand for vehicles has fallen by 30 per cent," Singh said, adding that "We can easily ramp up capacity to 100,000 units, when we want."

Having cut output at its existing Indian plant by 20 per cent between November and May as demand fell, Toyota is raising capacity to return it to 65,000 vehicles a year, he said. The plant is expected to produce 4,300 vehicles in June and up to 5,300 units in July.

The company has not yet decided on the price of the small car, but it would run on petrol, he said. About 70 per cent of the inputs for the car would be sourced from within India. "If we do not source inputs within India, then it won't be cost- competitive," Singh said.

At present, the company has 85 dealers throughout the country. It would go up to 95 by the end of this calendar year. By the end of 2010, it would be 150, he said.

Toyota Kirloskar managing director Hiroshi Nakagawa added, "The Indian auto market is seeing a recovery. We are expecting great potential from India." The company, which offers the Innova utility vehicle and the Corolla and Camry sedans in India, hopes to sell more than 50,000 cars in 2009.

"We would like to maintain what we did last year," Nakagawa said. Toyota sold 51,500 vehicles in India last year.

Toyota, the world's biggest automaker, posted its first-ever consolidated operating loss last year after a record profit the year before. It has been hit harder than most by the global auto slump because of its exposure to the United States and Japan, where sales have plunged to multi-decade lows.

Its new car plant in India is one of the few projects globally that it is still going ahead with.­

Cruiser to cost over Rs80 lakh
The company said the Land Cruiser, which has a 4.5-litre diesel engine, will be sold in two versions, costing Rs81.64 lakh and Rs83.1 lakh. Toyota will also introduce the Fortuner SUV by September and plans to sell 400 units each month, Singh said.

The eighth generation Land Cruiser is loaded with advanced technology and comfort features, said Nakagawa. ''Not only is the Land Cruiser a global benchmark in automotive engineering, it is also the ultimate lifestyle statement of luxury, comfort and best-in-its-class safety features.

Our aim is to bring to our customers the world's most admired SUV, backed by Toyota's countrywide assured sales and service support,'' he said.

Of the Land Cruiser's two options, one boasts nine speakers while the other more expensive model will have an advanced 6 DVD, 14 JBl premium speaker system, with EMV screen and a moon roof.

The multi-terrain ABS (anti-lock braking system) continually monitors engine revolutions and vehicle speed, instantly adjusting wheel-slippage regardless of surface conditions. The hill assist control further contributes to smooth hill starts, making the Land Cruiser suitable for mountainous terrain.

On the safety front, the car has 10 airbags with seat position sensors, active traction control, vehicle stability control and clearance and back sonar to assist in cornering and reversing.

The new Land Cruiser also claims to have the world's most advanced four zone air-conditioning system, where each passenger has an independent temperature control facility.

Singh said that in spite of the recent slowdown, the premium SUV segment had witnessed a growth, driven largely by the introduction of new models.