India emerges as Toyota's fourth largest market in 2024 as robust demand for utility vehicles and the successful Suzuki collaboration drive sales volumes.
02 Mar 2025 | 2998 Views | By Ketan Thakkar & Ashutosh Radhey Shyam
A successful tie-up with Suzuki Motor Co, rising demand for SUVs and a steady flow of investments into India have helped India leapfrog three places in a year to emerge as the Toyota Motor Corp’s fourth largest market in 2024. Not only does this make India the fastest growing market ...
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A successful tie-up with Suzuki Motor Co, rising demand for SUVs and a steady flow of investments into India have helped India leapfrog three places in a year to emerge as the Toyota Motor Corp’s fourth largest market in 2024. Not only does this make India the fastest growing market for the Japanese automaker, but also its largest outside the world’s top markets, China, the US, and its home market, Japan.
In 2024, India overtook three countries—Canada, Indonesia and Thailand—among Toyota’s global markets. In the year before, India had surpassed Brazil, taking the No.7 position within Toyota’s internal sales leaderboard.
The change in dominance is also reflected in the growth rate of each of these markets. Over the last four years, Toyota’s top two markets – China and Japan – have seen sales declines, while the US has grown by an average of 2.5% per year. Even a market such as Thailand, Toyota’s bastion in Southeast Asia, recorded negative 2.5% growth.
In contrast, India has grown by 40.9% per year on average throughout the period, going from 76,111 units in 2020 – the year of the pandemic – to over 300,000 in 2024.
Meanwhile, the second fastest growing market was Indonesia, with an average of 12.72%. However, looking at 2024 sales, Indonesia recorded a sales decline of 9.50%, while India sales rose 35.2%.
At the same time, sales in Japan, the home market, were down 13.8% in 2024, while those in China were down 6.9% due to a “shift to new energy vehicles and severe market conditions, such as intensifying price competition”.
The company’s yearly sales review captured these trends, observing that overseas sales were robust because of India and the US:
“Although domestic sales were affected by certification issues and the production suspension of the Prius, overseas sales reached a record high due to strong demand in North America and good performance in India. Global and overseas sales remained at the same level as the previous year.”
The report also called out the strong performance of the Urban Cruiser Hyryder, a rebadged version of Maruti Suzuki’s Grand Vitara, and inhouse model Innova Hycross.
The strong performance by the Indian unit has encouraged automakers, including Toyota, to turn more attention to this market. In early 2024, Toyota carved out a separate region – India, Middle East, East Asia & Oceania – instead of clubbing India within the Asia Pacific region, and put its India head, Masakazu Yoshimura, in charge.
Little wonder that S&P Global Mobility’s Light Vehicle Production (LVP) forecast projects the share of made-in-India vehicles in Toyota-designed parent vehicles to rise from 3% in 2024 to 7% by 2032, underscoring India’s rising prominence in Toyota’s global manufacturing chain.
To fuel the growth, the group is spending almost $4 billion in India to create up to 1 million units of incremental capacity in the country, and has plans to use Toyota Kirloskar Motors, the Indian unit, as an export hub going forward.
Multiple Factors
India’s rapid rise within Toyota’s global markets is driven by a multitude of factors, the most important of which are perhaps the successful production tie-up with Suzuki Motor, and the sharp rise in demand for SUVs and MPVs in India in the post-COVID period.
TKM’s rebadging strategy can be traced back to June 2019 when it started selling the Toyota Glanza, a hatchback based on the Maruti Suzuki Baleno. Over the years, these rebadged models have become a critical growth driver for Toyota in India, and have raised their contribution to around half of the total sales of Toyota Kirloskar Motors, the India unit.
Although inhouse model Innova Hycross still leads the charts, the Urban Cruiser Hyryder—based on the Maruti Suzuki Grand Vitara—has emerged as a top sales contributor for TKM.
Other Suzuki-based models, such as the Glanza, the Rumion, and the Taisor, helped Toyota expand its addressable market and helped bring in a lot of first-time car buyers into the Toyota family.
Today, the majority of TKM’s B segment portfolio now comes from Suzuki, while its offerings in the C and D segments are dominated by Toyota’s own hybrid models.
Last year, rebadged models played a critical role in helping TKM clock a scorching growth rate of 30%, when the Indian PV market grew by just 4-5%.
Interestingly, all this has come at a time when Suzuki Motor Corp cut its FY31 volume projection for India to 2.5 million from 3.0 million. Gaurav Vangaal, Associate Director, S&P Global Mobility believes Maruti Suzuki’s revised target reflects evolving market conditions.
“Beyond its own growth, Maruti has played a crucial role in Toyota’s success in India through its manufacturing and product-sharing partnership, enabling Toyota to strengthen its presence in the market,” he pointed out.
One such evolving condition, which has also contributed strongly to Toyota’s strong growth in India, is the rise of the SUV/MPV segment.
The share of utility vehicles in India’s PV sales has risen to an all-time high of 65%, from around 35% at the start of this decade. In contrast, the share of cars (hatchbacks and sedans) has declined to around 31% from 61%. This has been a blessing for Toyota, which has near total domination of India’s MPV market thanks to its Innova models.
The same SUV/MUV factor also helped TKM rival Mahindra & Mahindra to grow spectacularly in recent years.
TKM, meanwhile, attributed the success to the company’s focus on customer service and quality.
“Our driving force has always been an unwavering commitment to customer centricity, safety, and quality, which has led to the creation of newer opportunities and enabled us to reach out to a broader customer base,” the company said in a written statement. “Our growth strategy has been rooted in the brand’s core strengths—Quality, Durability, and Reliability.”
As for the coming year, the company said it will continue to strive to offer “something to everyone” depending on their mobility needs. “We will continue to follow efficiency enhancement measures across company operations and processes all aimed at scaling operations and meeting market needs more seamlessly,” the spokesperson added.