Toyota Takes It To Tata

It is no industry secret that India-based Tata Motors has shaken the automotive world with release of their $2,500 Tata Nano. Called "The People's Car," the Nano has the potential of being a huge hit in the company's home country.

Both GM and Toyota have said they plan to work out a vehicle that could rival the Nano. What had been unclear is if the automotive giants could match the ultra-low price point Tata has set. It looks like Toyota can. The Times Of India is now reporting that Toyota has informed India Prime Minister Manmohan Singh of their plans to begin building small cars in India.

The investment to produce cars meant for export out of India will cost less to Toyota because of the low standard wage and purchase parity India has with other nations. That means more can be purchased for the same amount of money in India than in countries like Japan, the United States, and the United Kingdom.

Toyota President Katsuaki Watanabe was quoted as saying, "There is a huge market for low-cost/price vehicles," but he expressed concern about Toyota's ability to maintain a high level of quality.Today, India's Commerce and Industry Minister, Kamal Nath, told The Times, "[Watanabe] met me and informed me that Toyota would be doubling its investments in India and would also make small cars in the market that would be exported to other countries as well."

Production of the car will take place at Toyota's current joint-venture facility near Bangalore. Final details are expected to be announced in three to four months. As the new World's Largest Automaker, this move will be key for Toyota to maintain global market share in the future.