Toyota Plans New Car Plant in India Amid Growing Domestic Sales Boosted by Suzuki Partnership

According to two reliable sources familiar with the matter, Toyota intends to commence the new plant with an initial production capacity ranging from 80,000 to 120,000 vehicles annually. Over time, this capacity could expand to approximately 200,000 units, as disclosed by one of the sources with direct knowledge of the plans.

This move to introduce a new plant with a proposed initial capacity represents an approximate 30% increase in Toyota’s existing manufacturing capacity in India, which currently stands at 400,000 units.

Furthermore, Toyota has initiated the development of a new sport utility vehicle (SUV) specifically designed for the Indian market. This SUV is scheduled for launch in early 2026 and is anticipated to become a cornerstone product for the upcoming factory. These details were provided by one of the sources and confirmed by a third source familiar with the company’s strategic initiatives.

Given that Toyota has not officially unveiled these expansion plans, the sources requested anonymity.

When approached for comment, a spokesperson for Toyota’s India division declined to provide any information.

Toyota’s sales in India have experienced remarkable growth, primarily due to the global partnership with Suzuki. Under this collaboration, both Japanese automakers incorporate certain vehicles developed by their partner and adapt and market them under their respective brands to bolster their product line-ups.

Products initially originating from Maruti Suzuki’s (MRTI.NS) portfolio, such as the Glanza hatchback and Urban Cruiser Hyryder SUV, currently constitute 40% of Toyota’s total sales in India.

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Notably, around two-thirds of Toyota’s present production capacity is utilized by Maruti Suzuki to manufacture vehicles for both carmakers as part of their collaborative agreement.

Earlier in September, Toyota had informed Reuters of its anticipation of achieving record domestic sales in 2023.

The Japanese automaker is now striving to attain a production capacity of 500,000 vehicles annually before the decade’s end, encompassing the car models it supplies to Suzuki, as reported by two of the sources.

India’s Growth Opportunity

Toyota’s expansion in India, recognized as the world’s third-largest car market, coincides with the company witnessing slowing growth in regions like Europe and North America. Furthermore, it faces increased competition in Southeast Asia from Chinese automakers.

Currently, Toyota operates two car plants in Bidadi, a town located in the southern Indian state of Karnataka. The third plant is being planned at the same facility. In May, Toyota implemented a third shift at the two existing plants, leading to a combined annual capacity increase of 30%, now exceeding 400,000 vehicles.

Regarding the new C-segment SUV, internally referred to as the 340D, Toyota aims to fill a crucial gap in its product portfolio. Positioned between the mid-sized Urban Cruiser Hyryder and the larger multi-purpose vehicle Innova Hycross, this SUV is expected to launch in early 2026. According to the sources, Toyota is collaborating with suppliers to achieve an annual production volume of 60,000 units upon its introduction.

In addition to the C-segment SUV, Toyota is considering introducing a “mini” version of the Land Cruiser model in India. However, this decision has not been finalized, and Toyota anticipates limited sales potential for this model. If the automaker decides to proceed with this venture, parts for assembly would be imported into India.