In 1981, the Indian government announced a people's car concept and established Maruti Udyog Limited. Maruti Udyog became a joint venture with Suzuki Motor in 1982, and developed into India's largest passenger car manufacturer. TMC also looked into entering the passenger car business, but did not obtain approval. TMC did receive approval to enter the truck market, and established DCM-Toyota Limited as a joint venture with local capital in 1983 and began producing and selling the Dyna in 1985.

Although TMC planned to sell 15,000 vehicles by the fifth year, an underdeveloped sales network and high costs resulted in slow growth, and sales peaked in 1991 at 3,700 vehicles. Consequently, TMC was compelled to liquidate this business in 1997. Around this time, restrictions on foreign capital in the automobile industry were eased, and in October of that year TMC established Toyota Kirloskar Motor Private Ltd. (TKM), a new joint venture, with the local Kirloskar Group. TKM constructed a plant in the outskirts of Bangalore in the southern state of Karnataka and entered the passenger car market with the start of production of the Qualis multipurpose minivan in December 1999.