Carmakers sharpen focus on electric vehicles

Toyota may bring back petrol Innova, M&M to start exporting e2o to UK by June, while Tata will continue foray into petrol variants

In the wake of the recent Supreme Court directive on high-powered diesel vehicles in Delhi, carmakers who depend heavily on diesel vehicles are revisiting their product launch plans and charting out strategies to mitigate risks of dependence on the cheaper fuel. This ranges from bringing back phased out petrol variants to focusing on electric vehicles to exports.

For instance, Toyota Kirloskar Motor, the Indian arm of Japanese Toyota Motor Corp that is consistently outdoing Volkswagen to be the world's top selling automaker in 2015, is planning to re-introduce the petrol version of its bread and butter car in India, the Innova.

Talking to Business Standard, Toyota Kirloskar Motor vice-chairman and whole-time director Shekar Viswanathan confirmed the company was thinking of bringing back the petrol variant of the Innova which it had phased out earlier. “We had a petrol variant of the Innova, but it was eventually phased out as the variant was losing out to demand for the diesel car, as diesel was subsidised. If need be, we will bring back the petrol car. This, however, would need some changes to be made at our Bidadi manufacturing facility,” said Viswanathan.

He conceded that Toyota derived 90-95 per cent of its sales in India from diesel vehicles, and in the long run, the idea would be to reduce dependence on a particular fuel type. “Globally, Toyota has a vision to sell only motor cars that are either electric, hybrid or are hydrogen powered vehicles by 2050. We have to slowly move towards that goal. As for India, at the moment, we are waiting for the government to bring in the Euro-IV emission norms.”

A Toyota dealer explained that Innova and Fortuner accounted for around 60 per cent of the company's sales, and these were all diesel vehicles. For the remaining segment (comprising the Etios range), the share of diesel versus petrol was around 50:50. Hence, the share of diesel in the company’s overall sales is very high at the moment.

Home-grown auto major Mahindra and Mahindra (M&M), too, has been put in a spot as several of its popular models including the Scorpio, Bolero and the XUV500, have been impacted by the SC order. M&M, on its part, has already brought in a petrol engine (Falcon) that would power its upcoming hatchback crossover or micro sports utility vehicle (SUV) KUV100.

This entry-level SUV would sport 1.2-litre petrol and diesel engines, both of which are not impacted by the recent clampdown on high-powered diesel vehicles. The car would start selling in India this month.

M&M is also all set to start exporting its electric vehicle e2o to the UK by June. Confirming the development, Pravin Shah, chief executive (automotive division and international operations) at M&M, said: “We would start selling the e2o in the UK market in the first half of the calendar year.” The company is trying to target the sub-10,000 pounds electric vehicles market in the UK and is buoyed by the results of some latest extensive market research it has carried out in that country.

As the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India (FAME) is implemented in India, the company expects it could potentially boost the demand for electric vehicles manifold. FAME scheme is part of the National Electric Mobility Mission Plan and would offer incentives of up to Rs 29,000 for bikes and Rs 1.38 lakh for cars.

Shah also maintained that exports, too, would continue to remain a major long-term thrust area. “However, one cannot open new export markets overnight; hence, we have to look at it as a long-term strategy.”

Companies, however, are also revisiting their launch plans. For example, Toyota's 3,000-cc diesel engine powered HiAce, a multi-seater vehicle that was to be launched in India in 2015, might not be immediately launched now.

Another car maker, Tata Motors, which has the Safari, Sumo and the Aria in the utility and sports utility vehicle segments, said in an e-mailed response: “While we will see some impact on our sales in the three-month period specified in the order, our continued foray into the petrol segment, as shown by recent launches, will stand us in good business stead over a period of time.”

Analysts feel that while exports and electric vehicles are part of the long-term plan, carmakers have to be very careful about the launches planned for the year to take care of the immediate impact in the coming quarters.

Popular cars that have been hit
Car	Variant
Toyota Innova	2494 cc diesel
Toyota Fortuner	2494 cc diesel, 2982 cc diesel
Mahindra Scorpio	2179 cc diesel, 2523 cc diesel
Mahindra Bolero	2523 cc diesel
Mahindra XUV500	2179 cc diesel