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Toyota Kirloskar Motors (TKM), in which Japan’s Toyota motors holds 89% controlling stake is set to make an entry into to smaller cities and towns, as they break away from their earlier policy to stay focused only on metros.

Toyota Kirloskar, which till date mainly focused of its sales target in metros and urban areas, has drawn up plans to sell 40% of its cars in the rural markets.

In calendar year 2010, the company has set a sales target of 70,000 vehicles compared to 55,000 in 2009.

The company is also vying to bring its small car, Etios, believed to be available in India, January 2011 onwards.While Etios is in its product basket, TKM aims to achieve a 150,000 car sales in 2011 and subsequently increase the volume to 300,000 - 350,000 cars by 2015.

Japan, the US and the EU are facing difficulties while India is emerging as the most promising market in the world. India is a very attractive market for Toyota. Currently, India has only 16 cars per 1,000 people while Japan has 593 cars per 1,000 people. The company believes the car market in India will grow in the range of 10% against the global growth rate of 5%. Our small car Etios will drive our sales volumes in India in the coming days. We are also looking at exporting Etios but nothing has firmed up yet.

To achieve this scale of volume, we have to enter India’s rural markets in a big way. We are aggressively expanding our dealership footprint in India and quite a significant portion of this will be in country’s heartland. By end of 2010, we plan to have 150 dealers across the country & Apart from this Toyota Kirloskar will invest Rs 3,200 crore in a second plant in Bidadi.

Mr. Hiroshi Nakagawa, managing director of TKM was quoted as saying on various developments from the company.

We believe that now time is ripe for us to target the smaller towns & cities because they are fast emerging as the new address of progress as people’s purchasing power is on the rise. So, we are going to sell our 40% products there and based on initial responses will improvise our plans

Another company official exclaimed the reasons for company going for small towns.

Well, Toyota has made its point clear, and we are acting as watch-dogs, whether other players are going to follow suit or not!