Japanese auto major Toyota on Wednesday said it could launch a small car in India within two years and its second plant may come up at the existing location in Bangalore.

"Toyota is developing a small car, which may be introduced in India within two years. While we are looking at several countries to market this product, it will be first launched in New Delhi," Toyota Motor Corporation's board chairman Fujio Cho told reporters.

On the company's plan to set up its second factory in India, he said that currently its Indian subsidiary Toyota Kirloskar Motors - a joint venture with Kirloskar Group has not finalised it.

"We still have a plenty of space left at the existing location in Bangalore and the new plant may come up there itself if we need additional capacity," Cho said.