Diesel Ban: Toyota Lost Business Worth Rs 1,700 Crore

The ban on the registration of diesel vehicles with engines above 2,000cc in Delhi NCR and a shift in consumer preference towards petrol engines has deeply impacted business of several carmakers.

Toyota, primarily known for its big car like Fortuner and Innova recently said that it has lost business worth around Rs 1,700 crore due to the ban on diesel vehicles in the Delhi-NCR region.

At the launch of the Toyota Innova Crysta petrol, N Raja, Senior Vice President & Director Sales & Marketing, Toyota Kirloskar Motors, told TOI, "The ban on sale of large diesel vehicles has impacted our business badly, and we have lost sale of around 8,500 units of the Innova and the Fortuner SUV." He added that though Toyota foresees ample demand for the 2.7-litre petrol variant of the Innova Crysta, it is the diesel variants of the popular MPV that will bring in the most numbers.

The Japanese carmaker is one of the worst affected carmaker in the diesel ban issue and it has been very vocal about it. Toyota had earlier said it is re-evaluating its operations in India will revise its strategy for up to 2020.

The company had invested around Rs 1,100 crore in India for developing diesel engines.

In December 2015, the NGT had banned the registration of all new diesel vehicles with over 2,000cc engine or diesel cars with more than 10 years plying on roads, in order to curb the rising pollution in Delhi-NCR.

Beside Toyota, German carmaker Mercedes Benz is one of the worst hit by the ban. The car manufacturer has also decided to hold its investment plan in wake of the ban and the policy uncertainty around diesel in the future.

Finding Alternative
As the industry is expecting that the ban will be lifted soon the Supreme Court in exchange for a one-time environment cess on the cars, Mercedes has agreed to pay 1 per cent environmental surcharge for being able to sell its diesel vehicles in Delhi and Kerala.

To further lower the ban impact, OEMs are working on giving petrol engine option across their line-up. Mercedes-Benz will make available all its existing models in petrol variants by this September.

Toyota India on Tuesday (August 8) launched the new generation Innova Crysta with a petrol engine in the country at a price range of Rs 13.73 lakh and Rs 19.62 lakh to compensate for the ban. The Innova Crysta petrol is powered by a new 2.7L engine, generating around 162 bhp of power and 246 NM of torque.

Toyota’s N Raja said, “Following the ban on big diesel vehicles by the Supreme Court last December, there has been an increased interest towards petrol from consumers.”