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Toyota Kirloskar Motor (TKM) on Tuesday announced that it was investing Rs 500 crore in its second plant in Bangalore to produce engines and gearboxes for its small car, Toyota Etios, with an initial capacity of 70,000 units.

TKM vice- chairman (V- C) Vikram Kirloskar said the production of Etios is scheduled by end of December, 2010. The premium hatchback which will be taking on the Ford Figo, GM Beat, Hyundai i20 and the Volkswagen Polo is being developed exclusively for the Indian market and was showcased earlier this year at the Delhi Auto Expo.

TKM subsidiary Toyota Kirloskar Auto Parts (TKAP) has two plants with a total investment of Rs 500 crore. One of these produces 52,000 engines per annum for the domestic market, while the second plant, with a production capacity of 1.7 lakh gearboxes, caters to the Innova sold in India, Thailand and Argentina, he said.

TKAP would invest an additional Rs 500 crore, part of which would go towards increasing the number of transmission boxes to approximately 2.4 lakh units per year and in setting up a third plant with a capacity of one lakh engines per year, of which 70,000 would be for the Etios and the balance for exports.