Toyota drops C SUV project for India

Sources attribute the company's decision to factors such as a failure to meet technical commercial viability and a shift in the global demand landscape.

By Ketan Thakkar calendar 09 Feb 2024 Views icon5312 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Computer-generated image used for representation only.

Computer-generated image used for representation only.

Close on the heels of announcing a new plant in Bidadi, Bengaluru, Toyota Kirloskar, the Indian subsidiary of the world’s largest carmaker Toyota Motor Corporation, has decided to drop the C SUV project scheduled for 2026. 

To create space for this new product, Toyota Kirloskar had decided to expand the capacity at the factory with a third plant and a planned investment of USD 400 million (about Rs 3,320 crore). Its plants are currently operating at over 90 percent capacity.

Toyota C SUV failed to meet technical commercial viability

Sources say, the project codenamed 340 D planned for a start of production in June 2026 with a potential annual volume of 75,000 units did not meet the technical commercial viability and hence the company decided to shelve the plans. The product had a significant export contribution from India of up to 50 percent. The decision to call off development is linked to the changing demand landscape globally as well, say people in the know.

While the investment plan for the third facility has already been approved, the company is looking at an alternative for the C SUV, which may have been based on the global Corolla platform. We had reported about the company’s plans to bring the Corolla Cross into India to reinforce its position in the Rs 20 lakh to Rs 50 lakh bracket, where Toyota was a leader by far during the last year. 

A lower-than-expected business potential and a focus on sustainable profitable business is what led to the decision, say sources. Toyota is, however, likely to look at an alternative to the C SUV in another six to eight months' time. The decision may mean the timelines for the new factory construction and utilisation may be pushed ahead even as the company looks to ramp up its Hyryder and Grand Vitara SUV production in Bidadi.  

To a query sent by Autocar Professional, Toyota Kirloskar spokesperson said, “As this pertains to our future corporate strategy and product plans, we would like to refrain from making any comments.”

New Toyota manufacturing plant near Bengaluru 

The announcement to set up a third manufacturing facility in India was made in November 2023. The new plant, when commissioned, will create 2,000 new jobs and be able to produce over 1,00,000 units a year. Toyota Kirloskar’s overall annual capacity in the country with the third factory will move up to 4,10,000 units, once the operations kick off. 

Toyota Kirloskar posted its highest-ever sales in 2023 and has even guided for a strong year in 2024 thanks to very high demand for its new MPV, the Innova Hycross, and sustained demand for the previous-generation Innova Crysta

The company also recorded its best financial performance in FY23. However, 2024 has seen some speedbreakers emerge in the form of the recent disruption in the global vehicle certification issue, which compelled the company to hold despatches of Innova Crysta, Fortuner and Hilux in India temporarily. The shelving of the 340 D project in India is another speedbreaker for Toyota.  

RELATED ARTICLES
TVS Motor Co's Singapore arm increases stake in Killwatt to 49%

auther Autocar Pro News Desk calendar26 Feb 2024

This acquisition would fall within related party transaction as Killwatt GmbH is an associate company.

India’s battery manufacturing capacity seen at 110-120 GWh by 2027-28, says Heavy Ind Secy

auther Autocar Pro News Desk calendar26 Feb 2024

The government has awarded 30GWh capacity under the PLI scheme for ACC battery manufacturing to three companies and is i...

Allcargo Supply Chain accelerates growth with expansion and diversification plans

auther Autocar Pro News Desk calendar26 Feb 2024

The initial phase of this expansion plans will begin from the north and south regions.