Toyota Motors has stated that fresh investments to India have been put on hold as the company prepares to review the status of diesel vehicle ban extensively.
The ban on diesel cars and SUVs with engine capacity above 2000cc along with National Green Tribunal’s latest decision to de-register 15-year-old diesel cars, has pushed Toyota to take such a stand.
What the ban basically means is that Toyota will not be able to sell their best selling cars in one of the largest cities in the country. While their old diesel cars, which are currently in circulation, will suffer too as NGT has directed RTO to de-register those diesel vehicles which are older than 15 years. In addition to that, they have also said that diesel vehicles which are older than 15 years, and registered in Delhi NCR, has to be scrapped. They cannot be sold anywher in India.
Such laws has pushed Toyota to not only refrain from new investments, but also put on hold the launch of upcoming new cars, which includes the new generation Fortuner SUV.
Toyota Kirloskar Motors has seen its new Innova MPV and the Fortuner SUV being banned from sale in Delhi/NCR region which has seriously affected company sales. This has caused the company to rethink launch of new models in the country with the new Fortuner also facing registration constraints in Delhi/NCR and Kerala which are both leading markets for this model.
Toyota Motors recently invested INR 1,200 crores in a new diesel engine plant with production having just commenced. The new facility has the capacity for 1 lakh engines per annum but is only utilizing 30% of this capacity.
Diesel engine ban has not resulted in decline in sales of cars with larger than 2000cc engine, but also other cars with smaller diesel engines. For eg, Honda Cars India’s diesel engine production unit in Tapukara, Rajasthan has a capacity to produce 400 diesel engines per day. They are currently producing just 150 units due to low demand for diesel cars.
via Times of India