Toyota Invests 300 Billion Yen in India to Counter China's Automotive Surge

According to a report by Japanese automotive media "Automotive Market" on May 7, 2026: Toyota Motor Corporation will build three new factories in India. By 2030, the company plans to increase production capacity to 1 million units annually—tripling current output. These new facilities will not only serve as sales hubs for India but also function as export bases for the Middle East and Africa. For Toyota, India is no longer merely a market—it is becoming a global supply base for Toyota’s automotive operations. Toyota states: “We are committed to mitigating management risks, avoiding dependency on specific countries, and establishing connections centered around emerging markets, independent of existing frameworks.”

Suzuki, likewise focused on the Indian market, is significantly ramping up its production capacity. The company plans to raise annual output from the current 2.6 million units to 4 million units starting from 2030. While meeting domestic demand in India, it is also preparing to expand its role as an export base. Suzuki began operating a new factory in Haryana in northern India in 2025 and plans to establish another production facility in Gujarat in western India by 2029. Suzuki’s exports to Africa and the Middle East have been strong, with shipment volumes reaching a record high of 333,000 units in 2024.

Both Toyota and Suzuki are establishing strategic bases in India and launching aggressive campaigns in the Global South, particularly in African markets. What lies behind their choice of this path?

Currently, two factories near Bangalore produce about 340,000 units annually. A new plant in Karnataka is scheduled to begin operations before year-end. The investment cost is approximately 33 billion rupees (about 5.5 billion yen), with expected production capacity rising to around 440,000 units. In addition to the “Innova” and “Camry Hybrid,” the company will continue manufacturing the “Urban Cruiser Hyrider” model supplied by Suzuki.

Toyota has decided to build three new factories in Maharashtra in western India, with a total investment of 300 billion yen. The first factory will go online in 2029, followed by the other two during the 2030s.

Notably, a sporty SUV named after the “Corolla” will be launched—a model widely popular worldwide. Toyota will focus on plug-in hybrid vehicles (PHVs) that are easy to use even in regions with underdeveloped infrastructure, combining high practicality and profitability to drive market expansion.

The port of Mumbai, located in Maharashtra, serves as a trade hub. Establishing factories in this region aims to streamline exports and reduce logistics costs. Meanwhile, large-scale production facilities in southern and western India are designed to create a resilient supply system that remains uninterrupted even in emergencies. Ultimately, Toyota’s number of Indian factories will grow to six, with production capacity tripling to 1 million units per year. This will make India Toyota’s third-largest overseas base after China and the United States. With India being the world’s third-largest market, Toyota will have a solid production base to meet all demands.

Suzuki is also leveraging its Indian factories as a foundation to further strengthen its African strategy. The company is eager to expand into Southern nations, aiming for a 10% market share and sales of 150,000 units by fiscal year 2030. African sales growth has been remarkable—127,000 units sold in 2025, pushing its market share to 9%. As of the end of fiscal year 2024, it has achieved over 10% market share in eight countries. Most of its top 15 models originate from India.

Fuel-efficient and durable small cars meet the needs of ride-hailing services and taxis, serving as indispensable products for local economic activities. At the same time, the company continues to reinforce its market position by developing SUVs tailored for affluent consumers. As of March 2026, Suzuki’s extensive sales network had expanded to cover 51 out of 54 African countries, with 259 sales outlets and 379 service centers. Repairs and spare part replacements are prompt and efficient.

The maintenance and supply system cultivated in India is steadily improving, centered on South Africa. In the future, the company plans to focus on sub-Saharan African countries such as Nigeria and Ethiopia, further expanding Suzuki’s influence.

However, the 54 African countries feature diverse ethnicities, political systems, and legal frameworks, posing risks of sudden shifts in market conditions. Currently, used cars vastly outnumber new cars. Even with population growth, there is a challenge in immediately stimulating new car sales. To expand business opportunities, it is necessary not only to build a sales network but also to develop a complete ecosystem—including financing systems and repair networks.

Data shows Africa’s total population is approximately 1.55 billion, while the new car market reaches only about 1.4 million units annually. Especially in sub-Saharan Africa, where about 1.1 billion people live—accounting for 70% of the continent’s population—only around 200,000 new cars are sold each year. In contrast, South Africa and North Africa have the largest new car markets, with annual sales reaching 600,000 units, supporting the entire African market.

Sales projections for sub-Saharan Africa suggest its population will grow to around 1.4 billion by 2030 and reach approximately 2.1 billion by 2050. Japanese used cars have already entered the market, reflecting the deep-rooted perception among locals that Japanese vehicles are reliable assets that do not depreciate quickly.

India was chosen as an export hub due to its geographical advantage. This country facing the Indian Ocean is not only close to the Middle East and Southeast Asia but also to Africa. The straight-line distance from Japan to Africa is about 12,000 km, whereas from India it is just around 6,000 km. Shipping from Japan to South Africa takes about 40 days, but from India it takes only about 14 days. This logistical speed is crucial for maintaining low product prices and rapidly adapting to market fluctuations.

Chinese manufacturers are entering the market with affordable electric vehicles. However, Suzuki’s lightweight body manufacturing and mass-production capabilities combined with Toyota’s hybrid technology and robust distribution channels enable them to achieve price points comparable to Chinese vehicles.

For decades, Japanese automobiles have built a reputation for durability. Toyota’s decision to establish a production system capable of 1 million units annually in India marks a firm step toward leading in manufacturing, transportation, and maintenance across the vast future market. An India-centered system may, in the future, redraw the global automotive power map.

Original article: toutiao.com/article/1864500205048964/

Disclaimer: The views expressed in this article are those of the author.