Japanese auto major Toyota said it is considering to set up an engine and transmission plant in India as it looks to use more vehicle-parts made here in its cars than import them.

The company, which has a joint venture – Toyota Kirloskar Motor -- with the Kirloskar Group for its Indian operations, may set up the new plant at its upcoming second factory in Bangalore.

"In order to localise production (more), in future I am very keen to set up a transmission and engine unit in the second plant," Toyota Kirloskar Motor (TKM) Managing Director Hiroshi Nakagawa told PTI on the sidelines of Environmentally Friendly Vehicles Conference here.

TKM is investing Rs 3,200 crore in the second facility, which will have an initial capacity of 70,000 units as it gears to launch a small car in the Indian market by early 2011. Depending on demand the firm may increase the installed capacity to 200,000 units.

"The initial production (at the second plant) will be 70,000 units and depending on demand we will ramp it up to 200,000 units," Nakagawa said.