[NEW DELHI] Toyota Motor Corp, Japan's biggest carmaker, may bring out a small car in India in two years as it tries to take market share in Asia's fourth-largest economy from Suzuki Motor Corp.

Toyota, poised to become the world's largest carmaker, may make the small car in India and subsequently in other emerging markets, chairman Fujio Cho told reporters in New Delhi yesterday.

The Toyota City, Japan-based company plans to raise its annual capacity in India 10-fold to 600,000 vehicles a year by 2015, it said last month.

Toyota may also build a new factory in India next to its existing unit near the southern city of Bangalore, Mr Cho said. The carmaker would join Honda Motor Co and Nissan Motor Co in adding capacity in India to challenge Suzuki's Maruti Udyog Ltd, which has a 50 per cent market share in the country.

"For Toyota to continue increasing profit, it needs to expand in markets like India," said Ichiro Takamatsu, a chief investment officer at Alphex Investments Co in Tokyo. "There is enough room for Toyota and other companies to share the growth in India, as more people will be able to buy cars."

Toyota aims for 15 per cent of India's passenger vehicle market by 2015. It had a 3.7 per cent share as of March 31. The carmaker built 44,000 Corolla compact cars and Innova minivans at its factory in Bangalore last year.

Annual car sales in India may triple to three million by 2015, according to government estimates. Suzuki plans to raise capacity in the country to 960,000 cars a year by March 2010, as part of a one trillion yen (S$13.3 billion) five-year global expansion plan.

The carmaker aims to build 710,000 vehicles in India this year, it said in January. Suzuki owns 54 per cent of Maruti Udyog, which plans to change its name to Maruti Suzuki India Ltd.

Honda, Japan's second-biggest carmaker, plans to double the annual production capacity of its plant in India to 100,000 by the end of the year. - Bloomberg