Toyota plans India model with hybrid DNA
- New Delhi, Beijing agree maintaining peace vital for growth of bilateral ties
- Govt forms panel to review insolvency and bankruptcy code
- A property market slump may have ripple effects on innovation, productivity of staff
- I-T issues draft norms allowing foreign banks to convert local branches into wholly owned units
- Govt to decide on capital allocation based on bank business plans: SBI chief Rajnish Kumar
New Delhi: Toyota Motor Corp., the world’s largest car maker, plans to build an India-specific model with a strong focus on hybrid technology, a top official at Japanese company’s local unit said in an interview.
The impetus behind Toyota’s plan for a new car is India’s Corporate Average Fuel Economy (CAFE) norms, that seek to ensure that the mileage of cars on Indian roads improves by 10% between 2017 and 2021 and 30% from 2022 while carbon dioxide emissions comes down to 108 grams per litre starting 2022. The mileage improvement will be decided on the basis of litres of fuel consumed by a vehicle to run 100km.
The move is targeted at reducing the carbon footprint of the automobile industry. It is the first time such norms have been introduced in India.
Toyota, which has a diesel-heavy portfolio of big vehicles, may find it difficult to meet CAFE II norms, effective from 2021, without hybrid technology, admitted N. Raja, director and senior vice-president (sales and marketing), Toyota Kirloskar Motor Pvt. Ltd. “Even petrol cars” won’t help, he said.
“When CAFE III comes (after 2023)—90 grams per litre of carbon dioxide emission—real hybrids will have to come, not the mild ones,” Raja said, adding that the company’s engineers from Japan have begun studying the Indian market and will take at least five years to build an India-specific model with true hybrid technology.
Hybrids offer better fuel economy and lower running costs.
Toyota has been a pioneer in hybrid technology since 1997, especially with several generations of the Prius. Today, Toyota’s range of six hybrid cars encompass small hybrids , family-sized cars like the Toyota Prius, even station wagons.
The carmaker seems to have launched from the failure of some its smaller cars in India. “One thing is clear that after Etios and Liva, the platforms need to be global to get economies of scale. They will get support from global platforms but suit Indian conditions,” Raja said.
Localization of hybrid technology will be the challenge, he said.
“Localization has to happen... if you are looking at hybrid systems to come or if you are looking at a valuable price proposition, you need localization,” Raja said.
According to Anil Sharma, principal analyst, IHS Automotive, a hybrid power train does not really make sense for the Indian market unless there are efforts made to localize the technology.
“Then it is altogether a different ball game. Indian market will gradually move in that direction to realize the potential of hybrids. Toyota may want to have a first mover’s advantage. But all of it comes at a cost,” Sharma said.
Toyota’s efforts in this direction come in the wake of a ban on sale of vehicles above 2,000cc in Delhi that was effected in December 2015 and lifted in August 2016. Toyota along with Mumbai-based automaker Mahindra & Mahindra Ltd was among the worst hit companies since most of its vehicles had engines over 2,000cc. With air pollution becoming an issue across Indian cities, carmakers fear other cities could enforce such bans.
The move to enforce stringent fuel-efficiency norms is significant in the context of higher oil prices, a weaker rupee and efforts to contain pollution. India imports around 80% of its oil requirement.
Toyota has spent almost two decades in India and its one big success has been the Innova multi-purpose vehicle, which along with the Fortuner sports utility vehicle, accounts for 70% of the profits of the company’s Indian operations.