To Keep US Car Makers In Check, Toyota Moves On India

For the US car makers to do well, they not only have to gain back share in the US. They need to do well in the fastest growing auto markets, particularly China and India. GM had a banner year in China in 2006 and it hope to have that country remain one of its largest markets.

Toyota does not want to be outdone anywhere, so as it whips the American car companies in their own market, it is also planning to quadruple it output in India over the next three years. The big Japanese car company is putting $500 million into the market in the hope of moving its share from India from 5% to 10% by 2010. The car market in India is expected to rise 50% over that time period.

GM’s sales in India grew 81% in February to 3,081 vehicles. Maruti, the country’s largest passenger car manufacturer, saw sales jumping as much as 61.6% in February at 59,095 units.

Although GM and Toyota both lag the local manufacturers, they are clearly prepared to put large sums in for market share. It is now just a question of who gets the edge.

Douglas A. McIntyre can be reached at 247wallst.com. He does not own securities in companies that he writes about.