Toyota’s Indian subsidiary sees record profits and revenue, driven by hybrid demand and Suzuki alliance. Expansion plans include new plants and regional realignment, as India becomes a strategic hub for Toyota's global operations.
30 Sep 2024 | 744 Views | By Ketan Thakkar, Ashutosh R Shyam & Shahkar Abidi
Backed by strong demand for its hybrid vehicles and incremental output from global alliance partner Suzuki Motor Corporation, Toyota Kirloskar's profits grew by a whopping 240% in the March-ending financial year 2023-24 to ₹4,787 crore or USD 570 million.
The Indian subsidiary of the world's largest carmaker, Toyota Motor ...
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Backed by strong demand for its hybrid vehicles and incremental output from global alliance partner Suzuki Motor Corporation, Toyota Kirloskar's profits grew by a whopping 240% in the March-ending financial year 2023-24 to ₹4,787 crore or USD 570 million.
The Indian subsidiary of the world's largest carmaker, Toyota Motor Corporation, saw an incremental revenue of ₹22,000 crore in FY24, allowing the top-line to cross ₹50,000 crore for the first time. The total sales during the last financial year was up 66% to ₹56,444 crore or $6.7 billion.
During the year, Toyota Kirloskar more than doubled its production to 3.55 lakh units during the year, including a sizable volume produced for Maruti Suzuki. Its domestic sales witnessed a jump of over 40% to 2.46 lakh units in a market that saw growth slow to 8%, to 4.21 million units. The company held a market share of 5.82% for the year, marginally ahead of Kia India to grab the number 5 position.
The strong top-line performance also means that Toyota Kirloskar Motor has become the most profitable Indian car manufacturer, with an operating profit margin (EBIT) exceeding 10%, nearly double that of the previous year. This marks the first time in six years that an Indian carmaker has achieved a double-digit operating margin.
For comparison, Maruti Suzuki, India’s largest carmaker, recorded an EBIT margin of 11.7% in FY18. In FY24, Toyota Kirloskar earned an operating profit of ₹2.25 lakh per vehicle, nearly double the industry average of ₹1 lakh per vehicle.
This success is attributed to an enhanced product lineup and strong sales of the HyRyder and HyCross, as indicated by the company’s annual filings with the Ministry of Corporate Affairs. Although Toyota's volume in India is only 12% of Maruti Suzuki's, it is 41% the size of Maruti Suzuki in revenue terms.
Two key factors have driven this upsurge in profits. First is a remarkable, 49% year-on-year volume growth to over 260,000 units, driven by strong demand for the HyRyder and HyCross, which collectively surpassed 100,000 units in sales. Domestic sales volume for Toyota Kirloskar rose by 42% to 245,676 units in FY24, marking the highest growth in 12 years. As a result, the company's market share in the over-four-meter SUV segment increased to 14% in FY24 from 9% the previous year.
This, however, is part of a trend. Over the past five years, Toyota has achieved an annual volume growth rate of 10.29%, double the industry average of 4.5% during the same period. The company has consistently improved its absolute volume for four consecutive years, increasing its utilization rate to over 75%. Toyota's total installed capacity in India is 342,000 units, with two plants located near Bengaluru.
Secondly, the enhanced product mix and average selling price (ASP), bolstered by higher-end models like the HyRyder and HyCross, have significantly boosted its average revenue per vehicle to ₹2.1 million—almost double the average car prices in India.
The company holds a dominant market share in the UV 3 (length over 4.7 meters and up to ₹15 lakh) and UV 4 (priced between ₹15-25 lakh) segments, with shares of 97.8% and 71%, respectively. In the last fiscal year, Toyota gained approximately 20% market share in the UV4 segment, further consolidating its position in the higher-ticket size market.
To keep up with the demand , the company introduced a third production shift at one of its factories during the year, and continues to expand its capacity. After announcing Plant C in Bidadi, Bengaluru in 2024, which will call for an incremental investment of over ₹6,000 crore, Toyota has also signed an MoU with Maharashtra Government to invest another ₹20,000 crore, underscoring the role of India in its future global expansion. The Japanese parent, Toyota Motor Corp, recently established a new 'India, Middle East, East Asia & Oceania Region', calling India “an important strategic base for the markets west of India”.
Meanwhile, the momentum has continued into the new year, going by the numbers. From April to July of FY25, Toyota Kirloskar sold over 97,000 units, registering a growth of 35% in a sluggish market, which has grown by merely 1%. Of this, over 50,000 units came from Maruti Suzuki; as a result, the maker of Innova and Fortuner had its highest market share in recent years at 7.8% in April to July of FY25.