Toyota Motor Corp. is planning to set up a research and development facility in India through its local subsidiary, according to reports, highlighting the increasing significance of the market.

The new R&D center will commence operations with a workforce of approximately 200 individuals in Bangalore, located close to Toyota Kirloskar Motor’s existing manufacturing plant in Bidadi.

The team is expected to expand to around 1,000 engineers by 2027.

The creation of the research facility follows Toyota's reorganization last year, which designated India as the central hub for its operations across the Middle East, East Asia, and Oceania. The company has also disclosed a range of key investments to establish India as a global center for innovative and eco-friendly technologies.

Toyota is yet to introduce plug-in vehicles in India, but is instead observed to be focusing on petrol and hybrid models, along with a partnership with Suzuki Motor to boost sales in the world's third-largest automotive market.

Toyota appears to be carefully examining the R&D activities of Suzuki’s Indian branch in Rohtak, which is one of the largest automotive engineering centers in the country with around 3,000 engineers.

 

The Indian research center is expected to be Toyota’s third R&D site in the Asia-Pacific region outside of Japan, following similar initiatives in China and Thailand. Though it will initially focus on the Indian market, it may later evolve into a worldwide R&D hub, similar to the Bengaluru facility of Mercedes-Benz, which employs over 9,000 personnel.

In the past, Toyota had considered establishing an R&D center in India in 2010 but did not proceed with the plan, according to reports. Now, the company is reinforcing its collaboration with Suzuki to unify R&D and product development efforts.

An important illustration of this is Toyota’s forthcoming Urban Cruiser EV, which will be a rebadged version of Suzuki’s debut electric vehicle, the e-Vitara.

This model, scheduled to be manufactured at Suzuki Motor Gujarat starting in 2025, represents the first step for the two Japanese auto manufacturers as they aim to penetrate both the Indian and global electric vehicle markets together.

The increased collaboration arises at a pivotal moment. Following the death of Osamu Suzuki, the longtime head of Suzuki Motor, the Japanese automaker is striving to maintain its significance domestically, where it holds a much smaller market position compared to Toyota and Honda Motor Co.

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At the same time, Toyota is said to be keenly focused on India as it experiences a decline in market share in China, where local companies such as BYD Co. are quickly gaining popularity among consumers.