Toyota Motor Corporation small car to be produced in India is likely to get ignited from engines imported from Asean countries such as Indonesia or Thailand. The company seeks to gain from the free trade agreement that India is likely to sign with Asean countries allowing it to import the products at zero duty. Toyota has two plants in Indonesia and four in Thailand. The company produces engines at plants in both the countries.

Toyota is planning to make premium compact car for the Indian market which would be sold in the overseas markets. Global automobile companies such as General Motors, Ford, Suzuki, and Hyundai are already setting up engine manufacturing units in the country. Besides these, Argentum Motors too, has contract manufacturing capability to produce four lakh powertrains for global OEMs. Toyota's small car would be manufactured from a plant located near its existing plant in Bidadi for which the company is expected to make an investment of Rs 1,400 crore. The company plans to commence production by 2010.