Toyota Proposes Greenfield Investment in Maharashtra, Part of Diversification Strategy in India

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Toyota Kirloskar Motor (TKM) has announced a significant expansion with plans to set up a new manufacturing plant in Maharashtra, marking a pivotal move in the company’s strategy to enhance its presence in India. This ambitious project, set to involve an investment of around INR 200 billion (approx. US$2.38 billion), reflects TKM’s commitment to expanding its footprint in the country and driving the future of sustainable mobility.

A strategic investment in Maharashtra

On July 31, TKM signed a Memorandum of Understanding (MoU) with the Maharashtra government to explore the establishment of a greenfield manufacturing facility at Chhatrapati Sambhaji Nagar. The development signaled TKM’s intention to deepen its investment in India, building on its already substantial presence in Karnataka, where it operates two manufacturing units in Bidadi near Bengaluru.

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The new plant in Maharashtra represents a strategic expansion for TKM, which has been steadily increasing its production capacity and export contributions from India. TKM’s Managing Director and Chief Executive Officer, Masakazu Yoshimura, emphasized that the new investment would mark a crucial step in the company’s growth, enabling it to provide “qualitative mobility solutions locally and globally.”

Diversifying presence across multiple states

While TKM’s expansion into Maharashtra is a significant development, it has not come at the expense of its commitments in Karnataka. Karnataka Industries Minister MB Patil reassured that this move should not be seen as a setback for the state. He highlighted TKM’s continued investment in Karnataka, including plans for a third car manufacturing unit in Bidadi with an investment of INR 33 billion (approx. US$394.07 million), slated to be operational by 2026.

Patil’s comments underscore the broader strategy of multinational companies like TKM, which seek to diversify their manufacturing bases across different regions. This approach allows for logistical efficiencies and aligns with the broader goal of positioning India as a global manufacturing hub for greener and more sustainable mobility solutions.

Reinforcing India’s role in global manufacturing

TKM’s decision to invest heavily in Maharashtra is part of Toyota Motor Corporation’s larger vision of transforming India into a central hub for cleaner and greener automotive technologies. This vision is aligned with the company’s global restructuring, which has elevated India’s role within the new “India, Middle East, East Asia & Oceania Region.”

The investment in Maharashtra, once finalized, is expected to create substantial job opportunities and contribute to the region’s economic growth. The new plant is anticipated to manufacture around 400,000 electric and hybrid vehicles annually, generating 8,000 direct jobs and an equal number of indirect employment opportunities, according to Maharashtra Chief Minister Eknath Shinde.

Sustained commitment to Karnataka

Despite the expansion into Maharashtra, TKM remains firmly committed to its operations in Karnataka. The company has invested over INR 160 billion (approx. US$1.91 billion) in the state and created nearly 86,000 jobs across its value chain. TKM’s cumulative export contributions from India stand at around INR 320 billion (approx. US$3.82 billion), underscoring its focus on making in India for the world.

In 2022, TKM and its group companies announced an additional investment of INR 41 billion (approx. US$489.60 million) in Karnataka, aimed at reducing CO2 emissions and accelerating the shift towards electrification and greener technologies. This expansion is set to increase TKM’s production capacity in Karnataka to 442,000 vehicles annually by 2026, further cementing its role in the local economy.

The road ahead

TKM’s investment in Maharashtra marks a new chapter in its journey in India. As the company navigates its expansion across multiple states, it continues to contribute to the country’s manufacturing prowess and its global aspirations in the automotive sector. With a focus on sustainable and innovative mobility solutions, TKM is poised to play a key role in shaping the future of the automotive industry in India and beyond.

(US$1=INR 83.74).

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