Toyota’s new R&D unit signals its sharper India focus

Toyota Motor Corp. is setting up its first research and development centre in India through its local unit, people familiar with the matter said, signalling the market’s growing importance. The new R&D facility will begin operations with a team of about 200 people in Bengaluru, near Toyota Kirloskar Motor Pvt.’s existing factory in Bidadi, one of the people said, asking not to be identified because the details are private. The team will likely be scaled up to around 1,000 engineers by 2027, the person said.

Representatives for Toyota Kirloskar Motor declined to comment. Toyota didn’t immediately respond to a request for comment.

The research facility comes after Toyota last year reorganized India to be the hub of its operations across the Middle East, East Asia and Oceania region. The company has also announced a series of priority investments to mark India as a global hub for clean and green technologies.

Toyota is yet to start selling plug-in vehicles in India. It has so far been relying on gasoline and hybrid models and a partnership with Suzuki Motor Corp. to drive sales in the world’s third-largest vehicle market. The company owns a 5.4% stake in Suzuki Motor, data compiled by Bloomberg show.

Toyota is closely studying the R&D operations of Suzuki’s Indian unit in Rohtak — one of the country’s largest auto engineering hubs with around 3,000 engineers, the people said.

The India research center will be Toyota’s third R&D location in the Asia-Pacific region outside Japan, following similar investments in China and Thailand. While it will initially cater to the Indian market, it could later evolve into a global R&D hub, much like Mercedes-Benz’s Bengaluru center, which employs over 9,000 people.

Doubling Down

Toyota had previously considered an R&D center in India in 2010 but didn’t follow through, the people said. Now, the company is doubling down on its partnership with Suzuki to integrate R&D and product development.

A key example of this is Toyota’s upcoming Urban Cruiser EV, a rebadged version of Suzuki’s first electric vehicle, the e-Vitara.

The model, set to be built at Suzuki Motor Gujarat from 2025, marks the first step the two Japanese automakers will take in India as they look to break into the Indian and global EV markets together.

The deeper collaboration comes at a crucial time. With the passing of Osamu Suzuki, the long-time leader of Suzuki Motor, the Japanese carmaker is working to protect its relevance at home, where it is a much smaller player behind Toyota and Honda Motor Co.

Toyota, meanwhile, is sharpening its focus on India as it loses share in China, where local manufacturers like BYD Co. are fast winning over consumers.

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