Toyota Motor Corporation’s joint venture in India, Toyota Kirloskar Motor Corporation, will, in all likelihood, become the Japanese auto major’s wholly-owned subsidiary. The Indian partner, Kirloskar Systems, has told Toyota that it will not be able to subscribe to the allotted 26 per cent equity in the company and has requested its partner to subscribe to this portion. The Kirloskars have informed the government about this.

The government had earlier given permission to Toyota to increase its stake in the joint venture from 74 per cent to 89 per cent as the venture needed funds immediately, which the Kirloskars were not able to provide. Toyota will subscribe to the additional holding on behalf of the Kirloskars, and will give the Indian partner a chance to buy back the stake in a phased manner before 31 December 2004.

Toyota has brought in nearly Rs 522 crore into the joint venture. With an additional infusion of Rs 100 crore, planned for the near future, the Japanese company will hold 88.86 per cent of its Indian venture. If the Kirloskars wants to exercise the buyback option, they will have to buy nearly 104 million shares at a price to be determined by a separate agreement.

Toyota Kirloskar Motor Corporation is about to introduce a multi-utility vehicle, Qualis, in India. The 10-seater vehicle is being manufactured at its plant in the Bidadi industrial area near Bangalore.