With the new ban on diesel vehicles above a certain engine capacity (2,000cc) in Kerala, on the lines of the earlier one in the National Capital Region, Japanese automobile maker Toyota said it would look at launching a petrol version of its popular Innova brand, and of other products.
The company said if the ban continued, 13 per cent of its sales would be hit. Its Innova and Fortuner have taken a hit.
The uncertainty might hit capacity utilisation of its Rs 1,000-crore new diesel unit, expected to soon go on stream. Its capacity would be 110,000 units a year, for the domestic market.
IT WILL BE A DRY SPELL 13% of its sales would be hit, if the ban continues, 8% drop in sales in NCR 2,000 cc above new vehicles should not be registered in Kerala and those more than 10-year-old should not run on the roads across six cities of the state Major hit has been on Innova and Fortuner 4,400 units a month is the sales of Innova, down from 5,800-6,000 900 units a month is the Fortuner sales, down from 1,600 units
The company's sales in the NCR (National Capital Region) have already dipped by about eight per cent.
On Kerala, the NGT (National Green Tribunal) has said new diesel-run vehicles above 2,000cc should not be registered and those more than 10-year-old should not run in six cities of the state.
Akito Tachibana, managing director, Toyoa Kirloskar Motor, told this newspaper on Wednesday diesel was the victim of mistaken perceptions.
“We need a long-term vision. All of a sudden, our car is banned, after putting so much of investment. We don't have a future if they ban diesel,” said Tachibana, noting it takes close to five years to develop a new car.
T S Jaishankar, deputy managing director, said government policy lacked a long-term view. If this uncertainty continued, it would be a question mark on the 'Make in India' initiative. Enough time should have been given before taking such steps as a ban, he said. Quite unlike the clear road map for switching to Euro-VI fuel standards, with companies getting time to shift.
If diesel is bad, said Jaishankar, why not ban all vehicles operating on it? Why only those above a certain engine capacity?
The major hit has been on the Innova and Fortuner. Before the NCR ban in December 2015, sales of the former were 5,800-6,000 units a month; these are now 4,400 a month. Fortuner sales are now 900 units a month, down from 1,600 units due to ban in NCR.
However, Toyota Kirloskar welcomes the part of the NGT order on banning diesel vehicles above 10 years of age. Shekar Viswanathan, vice-chairman, said it would improve air quality by getting rid of older and higher polluting vehicles. "At the same time, we respectfully disagree with the order of banning the registration of diesel vehicles above 2,000cc in Kerala...The unintended beneficiaries are those who produce less than 2,000cc vehicles with the same diesel that is said to be polluting."
Asked if the company would invest in a petrol engine plant, Jaishankar said it was too early to discuss that. "We are waiting for the apex court's decision. We will take a call after that,” he said.