Kirloskar Motor Pvt. Ltd. (TKM), a joint venture between Toyota Motor Corporation and the Kirloskar group, is projecting to make India an export center for compact cars by the year 2012, including of a small car that is being designed in Japan specifically for India.

Toyota, which possesses 89% of the Indian venture, is set to begin production of the small car at its new unit in the southern state of Karnataka, initially with a capability of manufacturing 70,000 vehicles, which can be built up to 100,000 if the demand grows.

The small car being designed in Japan will be developed specifically for India.

Mr. Shekar Viswanathan, Deputy MD of the Indian unit's commercial division, on Friday stated that after the launch of compact car and bearing in mind the reaction, we will also be viewing the export market.

Mr. Viswanathan also added that in the beginning, the company would look at exports to South Africa, where demand was high.

The small car segment reports for around 70% of total sales in India, with market leader Maruti Suzuki having over 60% share of the segment.

Japan's Suzuki Motor Corp, last week declared a $310 million investment to establish a research and development plant in India that would finally serve as a R&D hub for compact cars for the company outside Japan.

Toyota Kirloskar, which provides the Innova utility vehicle, Corolla and Camry sedans in India, hopes to deal over 55,000 vehicles in the financial year 2010.

In the current financial year, around 1.2 million passenger cars were sold in India. India is one of the few markets where Toyota is moving ahead with its investments, even during touch economic conditions.