Toyota Accelerates Growth in India: New $400 Million Plant in the Works

Toyota’s Indian subsidiary announced on November 21, 2023 that it is constructing a new factory in Karnataka, India. This will be their third factory in the country. Estimates place the investment at 33 billion rupees (approximately $400 million), with completion scheduled for 2026. The move is in response to the potential expansion of hybrid electric vehicle sales and increased demand for battery electric vehicles.

Toyota revealed that it has signed a memorandum of understanding with the Karnataka state government regarding the new investment. The new factory is expected to have an annual production capacity of 100,000 units. Toyota currently operates two factories in the same region, with a yearly production capacity of 342,000 units. With the new factory in operation, local production capacity is expected to increase by 30%.

Toyota began local production in India in 1999. With the minivan Innova as its mainstay, SUVs have recently performed well. In collaboration with Suzuki, the market leader with a 40% share, Toyota is also responding to the OEM of the Maruti Suzuki brand.

UK market research firm Global Data predicts that by 2030, the number of passenger cars and small commercial vehicles in India will reach 6.15 million units. This is a 40% increase from the 4.39 million units in 2022. Toyota’s sales in India account for less than 2% of Toyota’s global sales, with only 150,000 units sold in 2022. However, between January and September 2023, they have already sold 160,000 units, a 30% increase compared to last year.