Toyota Kirloskar, the Indian subsidiary of Japanese auto major Toyota Motor Company recently announced a target of achieving a 15-per cent market share of the Indian passenger car market by 2015 and 10 pc share by 2010.

Atsushi Toyoshima, managing director of Toyota Kirloskar Motor recently told the press in Bangalore, "If the Indian market keeps growing at an average pace of 15 per cent annually, it will be a four-million unit market by 2015 and we would want to be selling 15 per cent, or 600,000 cars by that time."

So far Toyota has lunched mid-sized cars in India, which despite becoming bestsellers in their respective segments hardly bring in the numbers needed to achieve the target the company has set for itself. Toyota sold approximately 41,000 cars in 2005 and has a 4-per cent market share in India.

With such numbers under its belt in a market growing at 20 per cent annually and with immense potential, Toyoshima's words seem to ring hollow.

It would be an understatement to say that Toyota has kept a low profile in India; for an auto company that leads in virtually every region in the world its progress in India has been unremarkable. Its leadership status in various segments is by virtue of the fact that it does not have serious competition in India yet.

The most glaring example is the recent launch of the Honda Civic in July, which immediately ate into Toyota Corolla's sales leading Toyota to launch a host of promotional offers on the Corolla.

Toyota has so far invested around Rs1,200 crore in its Indian venture. While the company has time and again announced small car launch plans there is as yet no clarity on the project. The company is said to be conducting extensive feasibility studies to determine the ideal vehicle suited not just for the Indian market, but also for other BRIC countries such as Brazil, Russia and China. In that sense it is mulling developing a single platform for the small car venture and churn out more than one type of car from this platform for the BRIC markets.

Toyota's lineup in India includes the Corolla, Camry, Innova and the SUV Landcruiser. Its global portfolio includes a number of cars but the only one that closely approximates the Indian specs of a small car is the Yaris. The 2007 Toyota Yaris will debut in the US market in a 4-door sedan and 3-door liftback versions.

First launched in Europe in 1999, the Yaris was named the 2000 European 'Car of the Year' and is Toyota's best-selling model in the European market. Yaris was also named 'Japan Car of the Year,' in the same year. In the US market the Yaris will replace the Echo in the small car segment.

The Yari is powered by a 1.5-litre 4-cylinder aluminium alloy block, DOHC, 16-valve, variable valve timing with intelligence (VVT-i), sequential multiport electronic fuel injection ultra low emissions (ULEV2) engine. It comes with a bhp of 106 @ 6000 rpm and has torque of 103lbft @ 4200 rpm.

However, with a 1.5-litre engine the Yaris does not qualify for the small car status and the lower excise benefit in India.

Yet there are rumours that the company is developing a model that will be available in a hatchback and a sedan version built on the same platform. This makes the Yaris a greater possibility as it is sold in three versions--a hatchback, a notchback and a sedan version in Europe.

Sources say that Toyota's small car will be priced upwards of Rs5 lakh. At present, this price category comprises entry-level sedans, besides premium hatchbacks Swift and Getz.

A Toyoshima, managing director, Toyota Kirloskar Motor recently said, "The meaning of a small car differs by the market. We can look at small cars in any segment below Corolla to achieve the target," he said.

Last year Toyota said it would introduce the Daihatsu small car by August 2007. There has been almost no word about the Daihatsu car from the company for quite some time. Very sketchy details are now available about the car. It now seems that Toyota is unlikely to bring in the small car in association with Daihatsu, in which it holds 51-per cent stake.

Though previous discussions between Toyota and Daihatsu are said to have failed because of disagreements on price-sharing, sources said, the company is increasing capacity at its Bidadi plant in Karnataka from 16,000 units to 17,000 units but has no plans to make fresh investments in India.

However, Toyota is definitely increasing its focus on India as is evident by the fact that the Indian production operations of Toyota Kirloskar have been brought directly under the control of Toyota Motor Asia Pacific Company based out of Thailand. The Toyota Motor Asia Pacific Company will support Toyota production operations in Thailand, Malaysia, Indonesia, the Philippines, Vietnam and Taiwan.

The new company, which is a fully owned subsidiary of Toyota Motor Corporation in Japan, has been floated to strengthen the car maker's production and supply network through improvements in efficiency and speed of individual production companies. After some time, the new company will most likely assume the role of Toyota Motor Corporation, which has been supporting production, purchasing and logistics from Japan.

A global car major that is floundering in its home country but tasting success in India is General Motors. The company expects to sell 45,000 to 50,000 vehicle units in 2006. GM's products directly compete against Toyota's in the country. The Corolla and the GM's Chevrolet Optra compete in the premium segment while the Innova and GM's Tavera are positioned against each other in the MUV segment. Similarly the GM Vectra is positioned against Toyota's Camry, both being directly imported.

So far Toyota has outstripped GM in sheer numbers. GM sold 30,837 vehicles in 2005 compared to 26,166 in 2004, sales of the Tavera grew 121 per cent to 18,622 units in 2005, which has gained a major chunk of the taxi market especially after Toyota phased out its rival Qualis. Toyota Kirloskar sold a total of 46,348 vehicles including 36,547 Innovas and 8,866 units of Corolla in 2005-06.

GM has reworked its India strategy keeping in mind the market realities and the tax structures. GM India is also targeting to grab 10 per cent market share in India by 2010 but unlike Toyota, GMI's plans are based on hard investments. GM is targeting to launch its small car Spark (based on the highly popular Daewoo Matiz) by 2008, the year Tata Rs1-lakh car is launched.

The Spark will be manufactured in Talegaon in Maharashtra on land recently acquired by the company. The new facility will more than double GM's capacity in India, given that the company is in the midst of expanding its existing 60,000-unit facility at Halol near Vadodara in Gujarat, to 85,000 vehicles annually.

The Halol facility currently assembles the Chevrolet Tavera, the Optra, the Optra Hatchback and the Aveo. This investment will take GM's investments in India to more than $750 million.

Unless Toyota - which is giving the 'Big two' GM and Ford a tough fight in the US - firms up its small car plans and launches a small car in India in the next couple of years it may find itself outpaced in the race for the great Indian automobile market.