New Toyota SUV, Likely To Be Mahindra XUV700 Rival, Reportedly In The Works For India

• New reports online explains Toyota's expansion strategy in India

• The Japanese carmaker is planning a third manufacturing facility

• Development of a new mid-size SUV (codename 340D), likely to be a Mahindra XUV700 rival

• Brand is also considering a premium SUV positioned between the Fortuner and Land Cruiser for the Indian market

Within the Toyota lineup in India, a couple of premium models standout, yet there remains a noticeable absence of competition in some critical segments, especially in the SUV category. A recent report suggests that the Japanese automaker is working on a new SUV for the Indian market to fill the space between the Toyota Urban Cruiser Hyryder and Innova Hycross.

What's the current information available?

While the Toyota sources in the Reuters report have opted to stay anonymous, they did share that the new SUV is presently under development with the codename 340D. Considering the Hyryder's presence in the compact SUV segment and Fortuner sitting up above, it hints at this new SUV targeting India's mid-size SUV market that could compete with models like the Mahindra XUV700, Tata Harrier, and MG Hector. 

The report adds that the new SUV is expected to debut in 2026 and may potentially be exported to other right-hand-drive markets from India, with a production goal of 60,000 units annually. It is likely to be produced at the third, newly established manufacturing facility in the country the carmaker plans to construct on our shores. No official comment on these plans has been made by any representative from Toyota India.

Why introduce another SUV at this time?

Toyota has traditionally focused on larger segments, like the Innova MPV and Fortuner SUV. But they've recently entered the volume markets through partnerships with Maruti Suzuki, such as the Urban Cruiser Hyryder, which is also sold as the Maruti Grand Vitara. Both these compact SUVs offer options like AWD and strong hybrid variants and have been extremely popular in India.

Why opt for a mid-size SUV?

While Maruti does well in the smaller SUV segment, it's a tough competition for Toyota with vehicles like the Tata Nexon and Hyundai Venue offering many advanced features in the sub-4 metre space. Instead, Toyota could apply its SUV expertise to the mid-size SUV market, where cars like the Mahindra XUV700 and Tata Harrier are popular.

Are there any additional SUV models in the pipeline?

The Reuters report suggests that Toyota is considering the possibility of introducing a smaller version of the Land Cruiser luxury SUV in India. This model would likely sit above the Toyota Fortuner in the lineup. If Toyota proceeds with this plan, it's expected to be a locally assembled vehicle, positioned at a price point below the luxury segment offerings.

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