TO GET ahead in India's increasingly competitive auto market, Toyota Motor Corp. is building a new plant and freshening its lineup. It has also made an unusual investment: It opened a school. Built on a rugged hillside in southern India that is populated by wildcats and monkeys, Toyota's sprawling technical training school, which opened last year, gives about 180 junior-high-school graduates an education in everything from dismantling transmissions to Japanese group exercises. Toyota wants to turn students like Satish Lakshman, the son of a poor farmer, into a skilled employee who can boost the auto maker's fortunes in this key emerging market. "We are learning discipline, confidence and continuous improvement," says Mr. Lakshman, an energetic 18-year-old. Competition for entrance to Toyota's school is tough. The institute received 5,000 applications for 64 slots when it opened last year. The draw for these young men, all from poor families, is a free education and a job if they do well. The first class will graduate from the three-year program in 2010, when Toyota plans to open the plant to make its new small car. The school is part of Toyota's efforts to stage a comeback in India. During the last decade of rapid global expansion, Toyota poured its resources into expanding sales in the U.S., Europe and China, often at the expense of smaller markets like India. Toyota ranks seventh in sales in India behind smaller Japanese rivals such as Suzuki Motor Corp. and Honda Motor Co., according to market researcher CSM Worldwide Inc.. Since Toyota entered the Indian market a decade ago, its market share has slipped to 3.5% from a high of 4.7% in 2003, in part because its lineup here lacked a small, low-priced car. Now, as the U.S. market crumbles, Toyota is shifting its attention to India. The company is confident India's auto market will continue its strong growth over the longer term even though it is cooling this year in the face of a global economic slowdown. In 2007, Toyota sold 54,000 vehicles in India and aims to boost its sales to 400,000 vehicles a year by 2015, or about 10% of the projected Indian passenger-car market Of four million vehicles. Suzuki has about a 50% market share today. "What we are trying to do is to increase sales eightfold in eight years. It's going to be a really big challenge," says Hiroshi Nakagawa, head of Toyota's operations in India. To reach its goal, Toyota plans to add new models, including a compact, lower-cost car to compete in India's fast-growing small-car market. It plans to open a new plant with annual capacity of 100,000 vehicles. At the foundation of its growth plan is the Toyota Technical Training Institute. India's auto market is growing at such a fast pace that skilled workers are in short supply. Toyota says the school will enable the company to develop the productive, skilled employees it needs. Toyota has taken a similar approach in China, where it has helped the government run a technical training center since 1990. In India, rival auto makers are following Toyota's lead. In September, Honda announced plans to open a technical college. Other car makers have formed partnerships with India's technical institutes to improve training. The school teaches students practical skills such as welding, auto assembly and maintenance. It also gives the young recruits a smattering of classes in such subjects as math, English and Japanese as well as lessons in the company's cherished principles of consensus building, continuous improvement and eliminating waste. "Small drops of water make a mighty ocean," reads one sign on campus. "The industry is looking for a person who is flexible, focused and who can withstand a tough working environment," says T. So-manath, the school's principal. All students live in a dormitory and wear uniforms of red caps, tan shirts and brown slacks. Instructors emphasize a military-like attention to detail, inspecting students for stray facial hair and loose shirttails. When students go home for weekend visits they often bring these lessons with them. Mr. Lakshman says he told residents of his poor farming village how Toyota's principles might improve their time-tested ways of life. He encouraged them to find ways to save energy, including basics such as turning off a light when leaving a room. Like most families in his village, Mr. Lakshman's uses a bicycle to get around. But as India's new prosperity slowly reaches his village his family might one day be able to afford a car, he says