Earlier reports suggested that Toyota India was reconsidering its investment plans in the country due to the Supreme Court’s diesel ban. Currently in effect in the Delhi-NCR region, the ban doesn’t allow the registration of new diesel powered vehicles with a displacement of 2000cc and above. Now, reports suggest that Toyota has indeed put a halt on its investments in India.
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It is believed that the sales of diesel vehicles have reduced due to various reasons such as the recent NGT ban on diesel vehicles older than 10 years and diesel ban in the capital as well as the reducing gap between petrol and diesel prices. Popular models of the Japanese automobile manufacturer such as the Fortuner and the recently launched Innova Crysta have suffered a considerable loss in demand due to the diesel ban in Delhi.
Shekar Viswanathan, Vice –Chairman and Director, Toyota India was quoted saying that they are most definitely halting investments as there has been an erosion of confidence. He further added that they will bring in some products that were planned but fresh proposals will be put on a hold and products plans till the year 2020 will be reworked.
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Not only Toyota but even Honda India seems to have suffered the brunt of the slump in demand for diesel powered vehicles. The company, which began the production for diesel engines at its Tapukara plant in 2013, is utilizing barely 35% of its capacity. Toyota Kirloskar Motors (TKM), on the other hand; has invested about INR 1,200 crore for a similar plant but the utilization for the same stands at a mere 30%.
Companies are not able to plan the future course of action due to the uncertainty on the issue. These sudden decisions by the SC and the NGT are putting consumers in a fix as well as they are unable to decide whether to go ahead with the purchase of a diesel vehicle.
Source: ET Auto