Toyota Motor is set to construct a third car plant in India, marking its first expansion of production capacity in the country in over a decade. This move comes as its partnership with Suzuki Motor boosts domestic volumes, according to two sources.
The world’s largest car manufacturer plans for the new plant to have an initial capacity of 80,000-120,000 vehicles per year, with possible expansion to around 200,000 vehicles over time, as stated by one of the sources who has direct knowledge of the plans.
If realized, the proposed initial capacity of the new plant would increase Toyota’s existing manufacturing capacity in India by up to 30% from its current 400,000 units.
In addition to the plant, Toyota is also developing a new sport utility vehicle (SUV) specifically for the Indian market. Expected to launch in early 2026, this SUV will serve as a cornerstone product for the new factory, as mentioned by one source and a third source familiar with the company’s plans.
Due to the automaker’s non-disclosure of the expansion plans, the sources wished to remain anonymous.
A representative from Toyota’s India unit declined to comment on the matter.
Toyota’s sales in India have experienced significant growth thanks to a global partnership with Suzuki. Under this collaboration, the two Japanese car manufacturers share and modify vehicles developed by their partner, selling them under their respective brands to fill gaps in their product lineups.
Currently, 40% of Toyota’s India sales come from cars originally developed by Maruti Suzuki, including models such as the Glanza hatchback and Urban Cruiser Hyryder SUV.
The partnership between Toyota and Maruti Suzuki also involves the utilization of about two-thirds of Toyota’s current production capacity to manufacture vehicles for both companies.
In an interview with Reuters in September, Toyota stated that it anticipates achieving record domestic sales in India by 2023.
The Japanese automaker is now aiming to reach a production capacity of 500,000 vehicles per year in India before 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 facing slowing growth in markets such as Europe and North America, as well as rising competition from Chinese players in Southeast Asia.
Currently, Toyota operates two car plants in Bidadi, Karnataka, and the third plant is being planned at the same location. The company added a third shift at the two existing plants in May, increasing their combined annual capacity by 30% to over 400,000 vehicles.
The upcoming C-segment SUV, codenamed 340D, will bridge the gap between the mid-sized Urban Cruiser Hyryder and the larger Innova Hycross. This SUV is expected to have an annual production capacity of 60,000 units when it launches in early 2026, according to the sources.
In addition, Toyota is considering introducing a “mini” version of the Land Cruiser in India. However, the company has not made a final decision and does not anticipate significant sales for this model. If the mini Land Cruiser proceeds, parts will be imported for assembly in India, the sources added.