Toyota plans third India plant, new SUV as domestic sales surge. According to two sources, Toyota Motor (7203.T) intends to construct a third auto factory in India, increasing production capacity there for the first time in more than ten years as a result of its alliance with Suzuki Motor (7269.T), which is expected to increase domestic volumes.

According to one of the sources with direct knowledge of the plans, the largest automaker in the world wants the facility to begin with a capacity of 80,000–120,000 vehicles annually, which might increase to about 200,000 over time.

The factory’s initial production capacity, estimated to be 400,000 units, would increase Toyota’s present manufacturing capacity in India by up to 30%.

According to the individual and a third source familiar with the company’s plans, Toyota has also started developing a new sport utility vehicle (SUV) for the Indian market that will be unveiled in early 2026 and serve as an anchor product for the new plant.

The individuals chose not to give their names because the manufacturer hasn’t made its growth intentions public.

A Toyota spokesperson in India declined to comment.

Due to a global agreement between Suzuki and Toyota, whereby the two Japanese automakers take some cars initially designed by their partner, then alter and sell under their names to flesh out their product lineup, Toyota’s India sales have increased dramatically.

The Glanza hatchback and Urban Cruiser Hyryder SUV, once part of the Maruti Suzuki (MRTI.NS) lineup, now make up over 40% of Toyota’s sales in India.

As part of their agreement, Maruti Suzuki produces automobiles for both automakers using about two-thirds of Toyota’s existing manufacturing capacity. In early September, Toyota, well-known for its Fortuner SUV and Camry hybrid in India, told Reuters that it anticipates record domestic sales in 2023.

According to two individuals, the Japanese automaker now hopes to have a production capacity of 500,000 vehicles annually by the end of the decade, including the car types it will provide to Suzuki.

GROWTH IN INDIA

At a time when it is experiencing slower growth in regions like Europe and North America and competition from Chinese manufacturers in Southeast Asia, Toyota is expanding in India, the third-largest auto market in the world.

In the town of Bidadi in the southern Indian state of Karnataka, where it already has two vehicle factories, a third one is being developed. It increased the aggregate yearly capacity of the two factories by 30% to over 400,000 automobiles in May by introducing a third shift.

According to two sources, Toyota is developing a new C-segment SUV with the codename 340D to bridge the gap between its mid-sized Urban Cruiser Hyryder and larger multi-purpose Innova Hycross.

When it debuts in early 2026, it is collaborating with vendors to create 60,000 units annually, they added.

They noted that Toyota is considering launching a “mini” Land Cruiser in India but cautioned that the automaker has not made a final decision and is not anticipating significant sales. They claimed that parts will be imported for assembly in India if Toyota decides to move through with the vehicle.