Toyota to Establish Third Plant in India and Introduce New SUV Amid Rising Domestic Sales

By Aditi Shah

NEW DELHI – Toyota Motor is planning to establish a third car manufacturing facility in India, marking its first expansion of production capacity in the country in over a decade. This move comes as a result of the company’s collaboration with Suzuki Motor, which has significantly increased domestic sales volumes, according to two sources with direct knowledge of the plans.

The world’s largest carmaker aims for the new plant to initially produce between 80,000 to 120,000 vehicles annually, with the potential to increase that number to approximately 200,000 in the future, as detailed by one of the sources familiar with the initiative.

The proposed additional capacity would enhance Toyota’s existing manufacturing capabilities in India by nearly 30%, from the current 400,000 units. Furthermore, Toyota has commenced the development of a new sport utility vehicle (SUV) specifically for the Indian market, set to launch in early 2026. This model will serve as a cornerstone product for the upcoming facility, according to the sources.

The sources requested anonymity, as the automaker has yet to officially announce these expansion plans. A representative for Toyota’s Indian division declined to offer any comment.

Toyota’s sales in India have surged due to its global partnership with Suzuki, wherein the two automakers adapt vehicles originally developed by one another and sell them under their respective brands to diversify their product ranges. Models such as the Glanza hatchback and the Urban Cruiser Hyryder SUV—deriving from Maruti Suzuki—now represent 40% of Toyota’s sales in India.

Currently, around two-thirds of Toyota’s production capacity is utilized by Maruti Suzuki for manufacturing vehicles for both companies, as part of their collaboration. Known for models like the Fortuner SUV and the Camry hybrid, Toyota anticipates record domestic sales in India for 2023.

By the end of the decade, the Japanese automotive giant aims to achieve a production capacity of 500,000 vehicles annually, which will include models supplied to Suzuki, according to the sources.

INDIA GROWTH

Toyota’s push in India, which is the world’s third-largest car market, is taking place during a period of sluggish growth in regions such as Europe and North America, along with rising competition from Chinese companies in Southeast Asia.

The company currently operates two manufacturing plants located in Bidadi, Karnataka, and plans to build a third facility on the same site. Earlier this year, Toyota introduced a third shift at the existing plants, increasing their combined annual capacity by 30% to over 400,000 vehicles.

The new C-segment SUV, referred to as codename 340D, is expected to fill a market segment between the mid-sized Urban Cruiser Hyryder and the larger multi-purpose vehicle Innova Hycross, according to the sources.

Additionally, Toyota is considering launching a "mini" Land Cruiser in India, although preliminary forecasts suggest sales might be modest. If the project proceeds, parts for assembly in India may be imported.