BENGALURU (Reuters) -Japan’s Toyota Motor on Tuesday said it will invest nearly $400 million to set up a third manufacturing facility in India as it looks to meet surging demand for its vehicles.
The new plant, which will create 2,000 new jobs and produce over 100,000 units annually, would take Toyota’s overall capacity to 410,000 units per annum.
The plant would also be the world’s largest automaker’s first capacity expansion in over a decade.
Reuters in September was the first to report Toyota’s plans for setting up a third plant in the southern state of Karnataka, where it already has two plants.
“Toyota continues to be highly positive on the Indian market,” Masakazu Yoshimura, MD and CEO of local unit Toyota Kirloskar Motor, said in a statement.
The expansion offers the potential to grow in the supplier ecosystem further, Yoshimura added.
The company’s India sales have soared due to a global partnership with Suzuki Motor, under which the two Japanese car makers take some vehicles initially developed by their Indian partner Maruti, then tweak and sell under their brands to fill out their product line-up.
About two-thirds of Toyota’s current production capacity is used by Maruti Suzuki to build vehicles for both car makers as part of their partnership.
The expansion comes when Toyota has been facing slow growth in markets like Europe and North America and competition from Chinese players in Southeast Asia.
($1 = 83.2440 Indian rupees)
(Reporting by Munsif Vengattil and Aditi Shah; Writing by Hritam Mukherjee; Editing by Sonia Cheema and Tasim Zahid)