By on June 4, 2010

Woken up by the Tata Nano warning shot (which so far seems to be a dud), everybody agrees that the key to making India “the next China” is to start small. Why does Suzuki own more than half of India’s market? Small cars.  And motorcycles. Another key to emerging markets is to give people an easy upgrade path from two wheels to four wheels. Remember how BMW got started? Remember that the initial business plan for the Volkswagen was to offer citizens of the Third Reich a car for the price of a motor cycle?

No wonder manufacturers are scouring their line-up for cars small enough for the huge Indian market. About 10 small cars are said to pour into the Indian market this year, and that’s just the advance guard. Toyota joins the fray, not just with a small car, but with a big factory in the southern state of Karnataka.

“We will start production of the small car once the second plant is completed,” said Hiroshi Nakagawa, managing director at Toyota Kirloskar Motor Pvt. Ltd., told The Nikkei [sub].”The plant will be completed by December.”

Toyota has big plans for the Indian critter. The second plant will have an initial production capacity of 70,000 cars, which will be increased to 200,000 cars in phases.

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