Why is Toyota Building Three New Assembly Plants in India?

Nikkei Asia reported that Toyota Motor plans to build three vehicle assembly plants in India, tripling its production capacity in the country to one million units by 2030. 

Nikkei’s reporting adds that the new manufacturing facilities will be used to export to Toyota’s growing markets in Africa and Middle East.

This comes as Financial Times reporting suggests that Toyota is switching up its historically cautious approach to EVs, as the company seems to acknowledge the growing threat from Chinese carmakers. 

Toyota’s new plants in India

India has now surpassed Japan to become the third largest automobile market globally, according to information from the Indian Ministry of Road Transport & Highways.

Toyota already manufactures some vehicles at sites in India with its Bidadi plants producing models like the Corolla and Camry for regional distribution. Additionally, Suzuki Motor manufactures a BEV for Toyota at Suzuki Motor Gujarat in India.

According to Nikkei, the two new plants will be built in the western state of Maharashtra. The first will begin operations in 2029, with the other two scheduled to start in the 2030s. Nikkei reports that total investment is estimated at around JPY¥300bn (US$1.9bn) and will triple Toyota's production capacity in the country to 1 million units by the 2030s.

Toyota Kirloskar Motor, a Toyota led joint venture with the Indian conglomerate Kirloskar Group, for the manufacturing of Toyota vehicles in India, recorded its strongest year sales in 2025. Total sales were 3,88,801 units in 2025, a growth of 19% compared to the 3,26,329 units sold in 2024. 

The report from Nikkei adds that the new plants in Maharashtra will also serve as export hubs, supplying vehicles to both the Indian market and those in the Middle East and Africa.

Toyota in Africa and the Middle East

In its yearly report covering the financial year 2025, Toyota reported that Sales revenues in Central and South America, Oceania, Africa and the Middle East increased by JPY¥131.4bn (US$841m), or 3.0%, to JPY¥4,521.2bn (US$28.95bn) in 2025 compared with 2024.

Toyota's operating income in 2025 in the areas increased by JPY¥54.2bn (US$347.1m), or 27.4%, to JPY¥252.6bn (US$1.62bn) compared with 2024. 

The company attributed the increase in operating income mainly due to marketing efforts.

Toyota’s EV shift

In recent times Toyota have had a focus on hybrid models, rather than positioning themselves entirely toward BEVs. The company also gears themselves towards developments of fuel cell electric vehicles and have been working on the technology since 1992. 

Toyota's Chairman has argued hybrids have a better environmental impact than BEVs. In an interview with Automotive news in 2025, Akio Toyoda claimed:  "We have sold some 27 million hybrids. Those hybrids have had the same impact as nine million BEVs on the road."

However, a shift appears to have taken place. The Financial Times reported that Toyota doubled EV sales in the first three months of 2026 to a record 79,002 compared with the same period last year, as the introduction of seven new models lifted its line-up of electric cars to 19. 

Chinese brands such as BYD, who partnered with Toyota on EV R&D and battery technology, are dominating the global EV market, with BYD overtaking Tesla earlier this year to become the world’s top EV seller. Toyota’s pivot towards EVs could be seen as an attempt to counter China's growing lead in the sector.

US manufacturing increase for EVs

As other companies like Stellantis and Ford have recorded writedowns, Toyota has been ramping up its EV manufacturing capacity, particularly in the US. 

In March 2026 Toyota announced that it had invested US$800m in a Kentucky plant to “Prepare for production of battery electric vehicles.”

The investment was part of a larger US$1bn investment in US manufacturing at Kentucky and Indiana Plants.