Toyota reportedly planning third India plant, new SUV as domestic sales surge

Toyota has unveiled plans to construct a new automobile manufacturing facility in India, marking its first expansion in production capacity in the country in over a decade. This move is being propelled by its partnership with Suzuki which has significantly increased domestic production volumes, according to Reuters.

The world's largest automaker aims to initiate the plant with an initial production capacity of 80,000 to 120,000 vehicles annually, with potential for expansion to approximately 200,000 vehicles over time, as disclosed by one of the Reuters sources. This proposed initial capacity expansion would augment Toyota's existing manufacturing capacity in India by up to 30%, currently standing at 400,000 units.

In addition to this manufacturing expansion, Toyota is in the early stages of developing a new sport utility vehicle (SUV) tailored for the Indian market, set to be launched in early 2026. This SUV is anticipated to serve as a cornerstone product for the new factory, as confirmed by one of the sources and a third party briefed on the company's strategies.

Toyota's remarkable sales growth in India can be attributed to its global partnership with Suzuki, under which both Japanese automakers adopt and adapt certain vehicles initially developed by their partner. These vehicles are then marketed under their respective brands, thus diversifying their product lineups. Notably, around 40% of Toyota's sales in India are now comprised of cars originally sourced from Maruti Suzuki's offerings, such as the Glanza hatchback and Urban Cruiser Hyryder SUV.

A significant portion of Toyota's current production capacity is utilised by Maruti Suzuki to manufacture vehicles for both companies as part of their collaborative arrangement.

While Toyota is renowned in India for models like the Fortuner SUV and Camry hybrid, it has indicated expectations of achieving record domestic sales in 2023. The automaker has ambitious plans to increase its annual production capacity to 500,000 vehicles by the end of the decade, including the models it will supply to Suzuki, according to two of the sources.

This expansion in India comes at a time when Toyota is experiencing sluggish growth in markets like Europe and North America and faces increased competition from Chinese players in Southeast Asia. The company currently operates two car plants in Bidadi, a town in the southern Indian state of Karnataka, and the third facility is set to be established at the same location. In May, a third shift was added to these two plants, increasing their combined annual production capacity by 30% to over 400,000 vehicles.

Toyota's forthcoming C-segment SUV, codenamed 340D, will bridge the gap between its mid-sized Urban Cruiser Hyryder and the larger multi-purpose vehicle Innova Hycross, as indicated by two sources. Collaborating with suppliers, Toyota aims to produce 60,000 units annually when this model is launched in early 2026.