Toyota Kirloskar to operate at full capacity in FY2024, to produce over 300,000 units
With 100,000-plus bookings for the Hyryder midsize SUV along with Maruti Grand Vitara and bullish on demand for the new Innova HyCross MPV, Toyota India set to double its output in FY2024.
Riding high on the new product introductions – the Urban Cruiser Hyryder and Innova HyCross – Toyota Kirloskar Motor (TKM), the Indian subsidiary of world's largest carmaker in volumes is eyeing record output of 300,000 units in the next financial year.
Autocar Professional learns that with the incremental volumes of the Hyryder SUV and the new HyCross MPV slated to be launched in January 2023, the company is set to close FY2023 with an output of 150,000 to 160,000 units. This is set to double to 300,000 units in FY2024, with the combined volumes of Hyryder, HyCross and the Innova Crysta.
Speaking on the sidelines of the Innova HyCross unveil in Mumbai on November 25, Vikram Kirloskar, vice-chairman of Toyota Kirloskar told Autocar Professional, “We have never operated like this. On some days when the supply chain is good, we have produced 1,200 cars a day. Definitely, we will be able to utilise both the plants fully. We are hoping that in the next 6-8 months, supply chain issues from China settle down.”
Toyota Kirloskar Motor has registered strong double-digit growth of 56% in the first seven months of this financial year. The company has sold a total of 104,497 units in the April-October 2022 period (April-October 2021: 66,722 units). At this pace, it should be able to cross annual sales of around 170,000 units for the full financial year by end-March 2023.
Strong demand for hybrid tech
Commenting on the current demand environment, Kirloskar said, “I have a lot of confidence in the way the infrastructure spending is happening, the domestic market is growing, all industries are doing well. Hopefully, it will continue.”
The market traction for its recently launched midsize SUV Hyryder has already exceeded the company’s expectations said Kirloskar and the waiting period is running into months. The vice-chairman says the company is trying its best to ramp up, but the shortage of parts is hampering the output.
While Toyota has been mum on the booking numbers, between Suzuki and Toyota, the orderbook for this midsize SUV that takes on the likes of the Hyundai Creta and Kia Seltos, has already crossed over 100,000 units and the production capacity at Bidadi plant is booked for over 5-6 months, sources said.
While the chip shortages are predominantly impacting the supplies, there are other critical raw materials like copper and e-steel that are also facing disruption, which is affecting the production of motors which go into the company’s hybrid system, source said.
Interestingly, the traction for its hybrid powertrain has also exceeded the expectations. In the case of Toyota Kirloskar Motor, the strong hybrid variants account for almost 70% of its total orderbook, whereas for Maruti Suzuki it was about a third of its total booking numbers so far.
“We are trying to produce more; it is only the issue of the supply chain that we are still having problems with. Every time some issue comes from China, we all get very worried. We don’t know what small parts are coming from where, you get to know two or three weeks later, suddenly there are no supplies,” Kirloskar explained.
No mega investment lined up
In case of the HyCross, which will also be the first Toyota product to be imbibed by Maruti Suzuki, given the supply chain constraints, it will be important to see how the allocation mix between Toyota and Suzuki for this new MPV is played out. As per company sources, it is likely that Maruti Suzuki will be allocated about 20 percent of the production volumes of the new HyCross for Maruti Suzuki to dip its toes in the premium MPV market.
Given the strong order book and expected 100% capacity utilisation next year, when asked as to whether Toyota will consider the next phase of expansion, Kirloskar said, the company is not looking at any “mega investment” yet.
"Until we really see a sustained demand in the marketplace or economy, we will keep working on technology but not on inherent capacity addition. We will do complete efficiency improvement. After running full capacity, there is always room for improvement. We started with producing 20,000 units of the Qualis from the same plant, today we are making 100,000 units. So, we will keep improving,” added Kirloskar.
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