Toyota to invest nearly $400 mln for third plant in India

Credit: REUTERS/DAVID DEE DELGADO

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BENGALURU, Nov 21 (Reuters) - Japan's Toyota Motor 7203.T 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.

The company's India sales have soared due to a global partnership with Suzuki Motor 7269.T, 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; Writing by Hritam Mukherjee; Editing by Sonia Cheema and Tasim Zahid)

((Hritam.Mukherjee@thomsonreuters.com; X: @MukherjeeHritam;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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