Toyota India puts forth proposal to set up diesel engine plant in India

One cannot deny the fact that demand for diesel cars are on the rise among the cash strapped citizens of India. Such is the demand for diesel cars that most companies are facing a shortage of diesel vehicles resulting in long waiting periods.

To counter this shortfall, Toyota India has informed parent company in Japan about their intention of setting up a new diesel engine plant in India. This demand has come from Toyota Kirloskar Motors, the joint venture between Kirloskar Group in India and Toyota of Japan, for the urgent need for setting up the diesel engine plant specially considering the fact that there is special provisions made in the 2012-13 union budget which has spared diesel vehicles from payment of any additional taxes.

Toyota saw increased demand for their diesel Etios sedan and Liva compact car. The company saw an increase of 70% for diesel driven cars and hence they are going full steam ahead in investing in the manufacture of diesel engines in India. A source close with the development, said, “With the demand for diesel cars in India rising very strongly, a request has been made to Toyota’s Tokyo headquarter for a diesel engine plant in India. It is very important to have more localisation to meet the increased demand. So far we have not heard anything as the company is still studying the proposal. However, we are hopeful of a positive decision. We cannot say anything further at this moment.”

Besides Toyota, Maruti Suzuki India Limited, the largest auto manufacturer in India have also announced investments of upto Rs 2,000 crores to set up a diesel plant at Gurgaon. This facility will have an annual capacity of 3,00,000 units per annum and will be completed by 2014.