Toyota Kirloskar, the Indian subsidary of Toyota Motor Corporation, recently announced the discontinuation of its ambitious C SUV project, internally referred to as 340 D, originally slated for launch in 2026. Despite plans for expansion, including a significant investment of USD 400 million for a third manufacturing facility, the project failed to meet the necessary technical and commercial viability standards. Sources familiar with the matter cite the project’s inability to align with evolving global demand dynamics as a primary reason for its shelving.
The C SUV project was anticipated to play a pivotal role in Toyota’s product portfolio, with a projected annual production volume of 75,000 units, with up to 50 percent earmarked for export from India. However, due to lower-than-expected business potential and a strategic shift towards prioritizing sustainable profitability, the company opted to explore alternative options. One such alternative being considered is the introduction of the Corolla Cross to the Indian market, aiming to strengthen Toyota’s foothold in the Rs 20 lakh to Rs 50 lakh segment.
The decision to discontinue the C SUV project may impact the timelines for the construction and operationalization of the new manufacturing facility. Despite this setback, Toyota Kirloskar remains steadfast in its commitment to its long-term objectives in India. The company is actively pursuing plans to ramp up production of its existing models, such as the Hyryder and Grand Vitara SUVs, at its Bidadi facility.
Responding to queries regarding the project, a Toyota Kirloskar spokesperson declined to comment, citing the sensitive nature of corporate strategy and product plans.
In November 2023, Toyota Kirloskar had announced its intention to establish a third manufacturing facility near Bengaluru. This move was projected to create approximately 2,000 new job opportunities and increase the company’s annual production capacity to over 1,00,000 units. With this expansion, Toyota Kirloskar’s overall annual production capacity in India is expected to reach 4,10,000 units. Despite encountering challenges in 2024, such as disruptions in global vehicle certification processes, the company remains optimistic about its future prospects in the Indian market.
The shelving of the C SUV project underscores the competitive nature of the Indian mid-size SUV segment. Toyota had positioned the C SUV to compete in this segment, intending to offer a comprehensive package of premium features, potentially including hybrid and fully electric powertrain options. Notable competitors in this space include popular models like the Hyundai Creta, Kia Seltos, MG Hector, Tata Harrier, Mahindra XUV700, and Skoda Kushaq, each offering unique features and competitive pricing.
While the decision to halt the C SUV project may present challenges, Toyota Kirloskar remains focused on delivering high-quality vehicles and strengthening its position in the Indian automotive market. Through strategic decision-making and continued investment in product development and manufacturing capabilities, the company aims to navigate through challenges and capitalize on opportunities for growth in the Indian automotive landscape.
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