Japanese car maker Toyota is exploring the possibility of setting up a research and development facility and engine plant in India, the head of its joint venture said today.

Managing Director of Toyota Kirloskar Motor (TKM) Hiroshi Nakagawa said Toyota currently undertakes R&D in Japan and Thailand, among other places.

He said one of the options being considered now is to set up a R&D facility in India. The proposal is at the discussion stage and it is his "wish and hope" that it would be established in future.

Asked if the company has plans to set up an engine plant in India, Nakagawa told reporters on the sidelines of Karnataka government-organised Global Investors' Meet here: "If we have a chance, we should establish engine facility here in India also".

But he indicated that the company would look at setting up an engine plant only when its annual sales in India reaches 200,000 units-plus.

Nakagawa said TKM is hiring 2,000 employees for its second plant, coming up at a cost of Rs 3,200 crore here.

For the current calendar year, TKM is targeting sales of 70,000 units from 55,000 in 2009.

He said TKM would start production of its compact car Etios, being developed exclusively for the Indian market, at the end of the current calendar year.

Once this product is "accepted" in India, the company would look at export opportunities of this car. In the first year, TKM is looking at manufacturing 70,000 units of Etios, Nakagawa said.