Toyota Kirloskar plans to continue selling diesel vehicles in India

However, firm may no longer offer diesel variants in smaller segments

Toyota Kirloskar plans to continue selling diesel models of large utility vehicles in the country. However, it doesn’t see much opportunity for diesel products in the smaller, mass market segment.

“Diesel is not going anywhere. Diesel will be a mainstay,” said Naveen Soni, senior vice-president, sales and service, Toyota Kirloskar Motors. The Japanese automaker operates in India through a joint-venture with the Kirloskar Group.

However, Soni indicated that the company might not to offer diesel variants of smaller vehicles. Instead, Toyota will likely concentrate on electric and hybrid vehicles, a focus area of its Japanese parent.

The decision to stop sale of small diesel vehicles, on account of an unviable increase in cost after the switch to more stringent emission norms, follows on the heels of market leader Maruti Suzuki and French carmaker Renault announcing plans to discontinue such models. “Making of products is defined by two factors — one is competitive pressure and the other is government regulations. The development in regulations shows that electric technology will play a greater role in the industry,” Soni said.

Toyota’s portfolio is very diesel-heavy with more than 80 per cent sales coming through the sales of large utility vehicle like Innova and Fortuner.

India will implement the second phase of the corporate average fuel efficiency (CAFE) norms and Real-World Driving Emissions test in 2022 and 2023, respectively.

On Wednesday, the company launched its first compact sports utility vehicle, Urban Cruiser, in the Rs 8.40 lakh-11.30 lakh price range. It will not be available in diesel option. The SUV segment has been the main volume driver in the domestic market as urban customers’ preference has shifted to this segment over the past decade. Most carmakers are now eyeing a share.

Toyota’s entry into the segment will help the firm expand its base in the mass market vehicles segments. It has traditionally been known for its premium offerings. The automatic variants are equipped with a lithium-ion battery with integrated starter generator comprising a torque assist function, an idle start-stop function and a brake energy regeneration function that enhances fuel efficiency. Other features include an LED light package, dual front airbags, ABS with electronic brakeforce distribution and advanced body structure.