New Delhi, August 23:

Toyota Motor Corp plans to build a new small car and introduce it in India within two years, the company chairman said today.

“We are looking at several markets, but the first production will be in India,” Fujio Cho said on the sidelines of a meeting of Indian and Japanese business executives. Cho, however, said the company was yet to finalise the type of the small car it plans to make.

Toyota currently sells three models - Corolla, Camry and Innova - in India’s expensive premium segment. Cho said the company would expand its existing plant in the southern Indian city of Bangalore if it decides to introduce new models.

Cho is part of the business delegation accompanying Japanese prime minister Shinzo Abe on his three-day long visit to India aimed at strengthening economic ties between the two countries.

Passenger car sales in India are growing close to 20 per cent annually, making it an attractive market for global automobile companies.

The Indian market is dominated by low-cost compact hatchbacks, accounting for three-fourths of the total car sales. Companies such as General Motors have already introduced small cars in India, and Toyota’s Japanese rivals Honda Motor Co and Nissan Motor Co are setting up plants to make small cars in India.