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Toyota Kirloskar Motor (TKM) has reported a consolidated net profit of Rs 4,787 crore for 2023-24 (FY24) — more than three times the earnings recorded the previous year.
This growth can be attributed to robust demand for its vehicles, particularly hybrid models and cross-badged cars from the Toyota-Suzuki alliance.
TKM’s country head and executive vice-president, Vikram Gulati, attributed the profit surge to a strong product portfolio, financial partnerships, value proposition, and customer-centric strategies that have expanded the company’s customer base and market understanding.
“As a next phase of alliance, the company is preparing for hybrid system supply... (and) other new technology models,” TKM stated in its documents submitted to the Registrar of Companies (RoC) and reviewed by Business Standard.
The company’s last financial year’s performance marks a significant turnaround from FY21, when TKM reported a net loss of Rs 55 crore.
Since then, TKM has consistently improved its financial health, recording net profits of Rs 519 crore in FY22 and Rs 1,404 crore in FY23.
In FY24, TKM’s sales volume surged by 48 per cent year-on-year (Y-o-Y) to 263,512 units, while sales revenue rose by 65.6 per cent Y-o-Y to Rs 55,866 crore, according to RoC.
Meanwhile, total expenditure increased by approximately 57 per cent Y-o-Y to Rs 49,026 crore.
TKM’s portfolio includes four rebadged models from Maruti Suzuki India (MSIL) — the Glanza (Baleno), Urban Cruiser Taisor (Fronx), Rumion (Ertiga), and Urban Cruiser Hyryder (Grand Vitara) — which account for nearly half of its total sales in India, according to sources.
The first cross-badged model from TKM to MSIL was introduced as the Invicto (from Innova Hycross) in FY24.
The global partnership between Toyota and Suzuki, announced in FY19, involves the mutual supply of products and components, including model swaps between their Indian subsidiaries — TKM and Maruti Suzuki India.
On the success of the Toyota-Maruti Suzuki alliance in India, Puneet Gupta, director-mobility, S&P Global, stated that it rapidly amplified the two companies’ product portfolio across mass-market segments.
“The vehicles from Toyota present an impeccable synergy of pricing, product excellence, and premium positioning, compelling consumers to choose Toyota, thereby bolstering the brand’s market share,” he said.
Toyota holds an 89 per cent stake in TKM, with the remaining 11 per cent owned by Kirloskar Systems Private Limited.
Commenting on TKM’s recent success, Gulati said: "We have always remained ahead in assessing and understanding the diverse needs of our varied customers and market trends.”
He highlighted that the company's sport utility vehicle (SUV) and multi-utility vehicle (MUV) segments, with models like the Innova Crysta, Fortuner, and Urban Cruiser Hyryder, have been the biggest contributors to its growth.
Gulati noted that TKM's manufacturing facilities in Bidadi, Karnataka, have been operating at 100 per cent capacity for “quite some time” due to strong demand.
“This allowed us to not only increase production but also tap into the booming demand in both domestic and export markets.
"In the current calendar year, over 14,000 units of the Urban Cruiser Hyryder were exported,” he noted.
In response to rising demand, TKM introduced a third shift at its manufacturing facilities in 2023, expanding its annual production capacity by about 32,000 units.
Total annual production capacity at its two Bidadi facilities now stands at 342,000 units.
Last November, TKM announced plans to establish a third facility near the existing ones at a cost of Rs 3,300 crore, which will increase the company’s total installed capacity to 432,000 units per annum.
TKM is further expanding its production capacity.
Last month, the company signed a memorandum of understanding (MoU) with the Maharashtra government to explore the establishment of a greenfield manufacturing facility in Chhatrapati Sambhaji Nagar.
“The proposed new facility will focus on advanced green technologies and is aimed at serving wider markets within the country and abroad,” Gulati added.
