Exclusive: TVS Motor to Set Up a New Plant; Explores Gujarat, Madhya Pradesh Among other States

TVS Motor Company is evaluating plans to set up a new manufacturing facility, likely in Gujarat or Madhya Pradesh, as it prepares to support strong growth in volumes expected over the next few years, according to sources familiar with the matter.

Sources said the plans for a new plant come as the automaker is working toward a mid-term aspiration of increasing annual production to about 10 million units by the end of the decade. TVS has also been ramping up its three-wheeler production, and also has an MoU with Hyundai to manufacture last-mile mobility-focused electric three-wheelers and micro four-wheelers under the partnership.

While Tamil Nadu and Karnataka are also being explored for the new facility, sources said Gujarat and Madhya Pradesh are the frontrunners. The facility is expected to come by 2028, and the automaker might be looking at a capacity of 2-2.5 million units, which is scalable. 

An email query sent to TVS Motor Company seeking comment on the proposed new plant and production plans did not elicit any response.

In 2025, TVS Motor signed an MoU with the government of Karnataka to invest Rs 2,000 crore in the state over the next five years as it plans to set up a global capability center and expand production and engineering capabilities.

Utilisation levels at its existing manufacturing facilities are running high, pushing the company to scale up its capacity, sources said. The two-and three-wheeler maker currently has three manufacturing plants in India - Hosur (Tamil Nadu), Mysore (Karnataka) and Nalagarh (Himachal Pradesh) - and one overseas facility in Karawang (Indonesia) with an estimated total capacity of 6.4 million units. 

The company has steadily ramped up output from these plants over the past few years in response to rising demand in both domestic and export markets.

TVS Motor, which surpassed Yamaha in 2025 to become the world’s third-largest manufacturer by sales volume globally, currently holds a market share of close to 20% in two-wheelers sold in India. The company has been gradually strengthening its position in the domestic market, with its share rising from around 16% three years ago.

The company’s growth strategy, supported by a diversified product portfolio spanning scooters, mid-size and premium motorcycles, electric two-wheelers and international markets, has helped the automaker expand its market presence and improve scale in both domestic and international markets.

Demand trends across the industry are also influencing the company’s capacity planning. Growth in recent years has increasingly shifted toward premium motorcycles, scooters and electric two-wheelers, segments where TVS Motor is building momentum through regular product updates and capacity investments.

Exports remain another important driver for the company. TVS Motor, which also owns Norton Motorcycles, has built a strong presence in developing markets, particularly in Africa, which contributes meaningful volumes to its overall output. This growing international footprint has increased the need for additional manufacturing capacity to support both domestic and overseas demand.

Electric mobility has emerged as another major factor shaping the company’s expansion plans. TVS Motor has become the leader in India’s electric two-wheeler market, and rising consumer adoption has been pushing production volumes higher. The company’s annual output in electric two-wheelers is approaching nearly 500,000 units, reflecting steady growth in the segment.

Sources said the company is targeting production of around 6.8 million to 7.2 million two-wheelers in the financial year 2027, reflecting a potential strong double-digit growth over an estimated production of about 5.7 million units in the financial year 2026. The planned expansion in capacity is essential to support this growth trajectory and maintain supply continuity across markets.

The production target for the financial year 2027 would position TVS Motor closer to Honda Motorcycle and Scooter India in terms of output levels and could intensify competition for the number one position in India’s two-wheeler market. The company has been steadily narrowing the gap with larger rivals over the past few years, supported by consistent growth across multiple product segments.

TVS Motor’s production rose to an estimated 5.7 million units in the financial year 2026, representing growth of about 22% compared with the previous financial year. Between April and February of the same year, the company produced 5.09 million units, up 20% from the year-ago period, indicating sustained momentum in demand and manufacturing activity.