Toyota Motor (7203.T) is planning to develop a third car plant in India to expand its production capacity in the country. The carmaker seeks the plant to begin with a manufacturing capacity of 80,000 to 1,20,000 vehicles a year, and over time, it would increase the capacity to about 2,00,000 annually.

The proposed initial capacity of the plant is expected to expand Toyota's existing manufacturing capacity in India by as much as 30 percent from 4,00,000 units currently. The company, known for its Fortuner SUV and Camry hybrid in India, also started the development of a new sport utility vehicle (SUV) for the Indian market. This product would be launched in early 2026 and be an anchor product for the new factory.

Moreover, the company is working with suppliers to produce 60,000 units a year when it launches in early 2026. Toyota's partnership with Suzuki Motor (7269.T) boosts domestic volumes, and about two-thirds of the company's current production capacity is used by Maruti Suzuki to build vehicles for both car makers as part of their partnership.

Currently, the Japanese carmaker has two car plants at Bidadi in Karnataka, with a third planned for the same region. It added a third shift at the two plants in May,  increasing their combined yearly capacity by 30 percent to over 4,00,000 vehicles.

The company targets to reach production capacity of 5,00,000 vehicles per year by the end of the decade, including the car models it will supply to Suzuki. Toyota is also looking at introducing a mini Land Cruiser in India, and if the company decides to go forward with the model, parts would be imported for assembly in India.