Toyota tilts towards petrol

Japanese auto major Toyota Kirloskar Motor is gearing up for a pick-up in sales of its petrol vehicles as demand for diesel powertrains falls amid the narrowing of price difference between the two fuel variants.

By Anasuya Basu in Calcutta
  • Published 10.09.18
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Calcutta: Japanese auto major Toyota Kirloskar Motor is gearing up for a pick-up in sales of its petrol vehicles as demand for diesel powertrains falls amid the narrowing of price difference between the two fuel variants.

"There has been an upshift of about 5 per cent in petrol vehicles last month as a result of the narrowing price differential. But even now, with a Rs 7-8 difference between petrol and diesel prices, any vehicle that runs 3000-4000 km per month will reap the economies of scale with a diesel powertrain," N. Raja, deputy managing director of Toyota Kirloskar Motor, said over the phone.

However, with stricter emission norms, prices of diesel vehicles will shoot up changing the nature of the the petrol-diesel mix.

"With the adoption of BS-VI norms, the petrol-diesel mix will be even more towards petrol as prices of diesel vehicles will significantly move up," said Raja.

"We are prepared for any such shift as we produce both powertrains for all our models," he added..

The share of diesel vehicles in the passenger cars, which dropped to 38 per cent in 2017-18, will further take a beating and fall to 36 percent in 2018-19 and further below 25 per cent after BS-VI norms kick in, say industry experts.

Sales of the Corolla, Etios and Liva diesel models of Toyota have slipped 5-10 per cent in the last 9-12 months, said the sales director.

Once the BS-VI norms kick in, prices of diesel cars are expected to go up Rs 75,000 compared with a modest Rs 20,000 for petrol cars.

At present, a diesel passenger vehicle is priced about Rs 90,000 to Rs 1,00,000 more than a petrol vehicle. With BS-VI in place, the gap will further increase to Rs 1.5 lakh to Rs 1.75 lakh. This will reduce the advantage of higher fuel efficiency of diesel vehicles.

Small diesel vehicles will become uneconomical but the demand in SUVs will continue although with a reduced share of about 60 per cent from 80 per cent in the segment. "Even now the fuel price is not in a make or break situation. But, in the future, with stricter emissions, move towards connected, electric and autonomous mobility, technologies will have to move up," said Raja.