Toyota has decided to drop its ambitious C SUV project, codenamed 340 D, due to technical and commercial viability concerns for the Indian market
In a strategic shift away from market expectations, Toyota Kirloskar has scrapped its plans for the C SUV project. The Japanese car giant has cited lower-than-expected business potential and a focus on sustainable profitability as the reason for this decision, according to reports. Toyota’s compact SUV – project 340 D – was scheduled to enter production in June 2026.
Toyota had planned for an annual volume target of 75,000 units, but the project faced challenges that led to its abandonment, which prompted the manufacturer to not deem it commercially viable. The decision is also attributed to changing global demand dynamics and the project’s significant export contribution from India of around 50%.
Despite having already approved a $400 million investment for a new plant in Bidadi, Bengaluru, the company is now reevaluating its product lineup. While the third facility was intended to increase the overall annual capacity to 410,000 units, the cancellation of the C SUV project may impact the construction and utilisation timeline.
Toyota Kirloskar had earlier considered introducing the Corolla Cross in India to strengthen its position in the Rs. 20 lakh to Rs. 50 lakh price range (ex-showroom), and this alternative is now reportedly being explored. Other alternatives are also likely to be considered, although the details are under wraps at the moment. We expect more premium and expensive Toyotas to roll on the Indian roads in the near future, likely with electric and hybrid powertrains.
Surprisingly, the decision to abandon the C SUV project comes hot on the heels of Toyota Kirloskar’s stellar performance in 2023, where the company posted its highest-ever sales and anticipated a robust 2024. However, the automaker has faced challenges in 2024, including disruptions in global vehicle certification that temporarily halted shipments of popular models like Innova Crysta, Fortuner, and Hilux across the globe.
The cancellation of the sub-4-metre project is seen as part of Toyota’s commitment to adapt to evolving market demands. As the automotive landscape continues to evolve, Toyota Kirloskar remains focused on addressing challenges and delivering competitive products in the Indian market. We expect more details to be revealed in the coming months.