Toyota Kirloskar Motors (TKM), the Indian subsidiary of Toyota Motor Corporation, has decided to drop the C-SUV project, codenamed 340 D, that was scheduled for 2026.
The decision comes close on the heels of announcing a new plant in Bidadi, Bengaluru. The company had planned to expand the capacity at the factory with a third plant and a planned investment of $400 million (about ₹3,320 crore). Its plants are currently operating at over 90 percent capacity.
Why is Toyota Dropping the C-SUV?
The project, which had a potential annual volume of 75,000 units, did not meet the technical commercial viability. The product had a significant export contribution from India of up to 50 percent. The decision to call off development is also linked to the changing demand landscape globally.
While the investment plan for the third facility has already been approved, the company is looking at an alternative product in place of the C-SUV, which may have been based on the global Corolla platform. The company had plans to bring the Corolla Cross into India to reinforce its position in the ₹20 lakh to ₹50 lakh bracket.
A lower-than-expected business potential and a focus on sustainable profitable business led to the decision. However, Toyota is likely to look at an alternative to the C-SUV in another 6-8 months.
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 due to increased demand.
Bidadi Plant
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 100,000 units a year. Toyota Kirloskar’s overall annual capacity in the country with the third factory will move up to 4,10,000 units.
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.