[Sommos]

The lingering uncertainty on sale of high-end diesel vehicles in the national capital region has come as a big blow to Japanese auto major Toyota's "confidence in India", forcing its domestic unit to rework its plans.

"Toyota Motor's confidence in India has taken a big knock after the Supreme Court ban since mid-December last on sale of high-end diesel cars and SUVs, and the continuing uncertainty... is only adding to it. But it is our job at Toyota Kirloskar Motor to reinstate that confidence," TKM Vice-Chairman Shekhar Vishwanathan said here over the weekend.

Stating that "the element of trust has been broken" between Toyota and the country as a whole, he said "it has become very difficult to launch new products or commit fresh investments. This is in spite of the fact that we have been producing vehicles complying with all the norms laid out in the country from day one".

STORY HIGHLIGHTS

The Apex Court of the country has banned registration of 2000cc and above diesel cars in Delhi-NCR from December 2015. The ban was initially upto 31st March 2016, but has been extended upto 30th April 2016. Staying strong on its aim to reduce pollution in Delhi, the Supreme Court has yet again extended the ban on registration of diesel cars with engine capacity above 2000cc. Judging by the latest hearing on May 9, it is quite clear that currently, the apex court has no plans to revoke its decision, although it has been hinted that the court may consider relaxing its order later. That said, the court hasn't revealed as to how long the diesel car ban in Delhi and NCR will continue this time. The latest hearing has also confirmed that smaller capacity diesel cars will not remain impervious to the Supreme Court's plan to reduce air pollution in Delhi for long.

A bench comprising Chief Justice, T S Thakur said, "Primarily, we are of the view that diesel vehicles cause more pollution than other vehicles. We may be right, we may be wrong. We are open to modifying it."



Source : http://economictimes.indiatimes.com/...w/52279228.cms

[SchumiFan]

Didn't know that only Toyota sold diesel cars in the market. They are typically slow to react to any changes and them plonking the same 1.5L engine into the built to a price Etios and top of the line Corolla says a lot about their commitment to the country.

They get their reliability right and the TCO is less. Else their line-up is as exciting as a watching Man United play the last three seasons

All this hue and cry because the NCR has a ban on above 2000cc engined diesel cars. I guess the rest of the India don't matter to them or are a level below the NCR brothers.

There are options available, Toyota. Just got to look at other diesel manufacturers (note: Mahindra). But they have to do some work if they are to achieve it.

Originally Posted by Sommos

Toyota says that Delhi-NCR is the single largest market with more than 8% of their total sales.

Then all the more reason for them to work on a replacement engine to serve the NCR region. Can't think that Governments will always be favorable to the car lobby, can we?

[Sommos]

Originally Posted by SchumiFan

All this hue and cry because the NCR has a ban on above 2000cc diesel cars. I guess the rest of the India don't matter to them or are a level below the NCR brothers.

There are options available, Toyota. Just got to look at other diesel manufacturers (note: Mahindra). But they have to do some work if they are to achieve it.

Toyota says that Delhi-NCR is the single largest market with more than 8% of their total sales.

[AYP]

They can plonk that D-4D 1.4 engine in the Innova. It will still sell.

Though I do not support this ban, but I am yet to see products which shows Toyota's 'confidence' in India. They have a couple of good products, but then that is just it. They are absent from many segments in India. Look at Hyundai and even Honda, they may not be doing everything right, but their actions show that they have confidence in our market.

[tsk1979]

Originally Posted by SchumiFan

Then all the more reason for them to work on a replacement engine to serve the NCR region. Can't think that Governments will always be favorable to the car lobby, can we?

The question is not of govt being favorable, or unfavorable. The question is of whether a law made by govt is followed.
For example, lets say you are invited to a SEZ to make a manufacturing plant. The regulations you are given allow you X amount of emissions.
You make the plant, spend 10,000 crores, and your emission is 0.8X.

One month after your plant is functional, the courts decide, that emission limits should be 0.1X, and suddenly, your investment is gone. Poof. Vanish.

When Toyota invested in making and selling Innova in India, there wasn't(and still isn't) any restriction from making cars above a certain engine size.

Suddenly, the judiciary makes a law and now you cannot sell the Innova.

Its like this.
Lets say govt of India says Euro IV in 2015. You make a plant making E-IV cars. In April 2015, when your plant is all said, they say no, E-VI from next year, you cant make and sell this.

This makes no sense.

There is no problem with making a law saying all cars should have 50 lakh fixed environment cell. But you cannot just invite companies to a country and then arbitrarily move around laws.

I think that is the crux of the matter.
At a personal level, think of it this way. You construct house, and the MCD gives you building regulations. eg your front door should be 1 meter away from the road. You construct the house, and 1 month after your house i ready with the front door 1m away from the road, suddenly MCD says, no we have changed regulations, it should be 10 meters. Demolish your house. Is it fair? You can always say life is not fair, but then the company can also say, well we can't invest any more, we will build the next house somewhere else.

[srishiva]

I think what they are worried more is these decisions that can come any day and affect their investments.
It could force some to bring in CBU with minimum investment to have less impact on oneself.

There is lots of un certainty regarding regulations/laws etc and that does not inspire confidence.

[Vid6639]

Actually I sympathize with Toyota and other manufacturers. Other countries lay down future plans well in advance and manufacturers have time to adhere to the new rules.

In India the amount of changes that Govt. has been doing with bans and defining segments is just absurd. Our Indian manufacturers like Mahindra and Tata are quick to react with jugaads but that's not how the Japanese and European manufacturers work.

Just looking at a few notable bans, regulations which have come into effect over the past few years.

1. A silly rule on ground clearance caused the Corolla to be classified as a SUV. Mahindra changed the bottom skid plate in a matter of weeks for the XUV500 and that went to being a sedan.
2. The diesel deregulation which meant that petrol diesel would be on par. Manufacturers had to reowork towards the shift for petrol.
3. The sub 4m segment. Toyota isn't even biting into this segment.
4. Now the diesel ban in NCR region for above 2000cc.
5. Still no massive incentives on Hybrid vehicles which should have been the case.
6. The new infrastructure cess announced during the budget based on different classification.

How is a manufacture supposed to plan for a country like India with such regulations coming into effect overnight and no clear planning by the administration.

I spend crores to develop a 1.9 litre engine specifically for India. A year later they change the rule from banning 2.0L and above to 1.6L engines and above being banned. What happens?

[Turbanator]

Didn't know that only Toyota sold diesel cars in the market

well said , they are complaining because of the investments they put for Etios twins have gone bad. Innova has got so large bookings that their plant is virtually booked until Year end. What they still don't understand is that their reasons for lagging behind in Indian market are there internal and not due to statutory or other things. Now if they had new Fortuner I am sure it would have also carried similar waiting list. Why can't they simply import Petrol engines and plonk to Innova / Fortuner ? Or better being the leaders in Hybrid what makes them launch such products ? why don't they instead discuss with Government authorities on some concessions on setting up locally? I am more than sure current Government would have handled such requests reasonably.

And coming to the greed part - they revised prices of Hybrid Camry after recent budget despite Zero change in Taxes for Hybrid cars and the fact that they have increased prices only at the start of Year. What else can we call this if not pure greed ? even dealers fail to understand and explain reasons for the increase in prices of Camry hybrid after the budget.

[SchumiFan]

Originally Posted by tsk1979

There is no problem with making a law saying all cars should have 50 lakh fixed environment cell. But you cannot just invite companies to a country and then arbitrarily move around laws.

I think that is the crux of the matter.
At a personal level, think of it this way. You construct house, and the MCD gives you building regulations. eg your front door should be 1 meter away from the road. You construct the house, and 1 month after your house i ready with the front door 1m away from the road, suddenly MCD says, no we have changed regulations, it should be 10 meters. Demolish your house. Is it fair? You can always say life is not fair, but then the company can also say, well we can't invest any more, we will build the next house somewhere else.

The law isn't necessarily affecting Toyota alone, is it? It applies to everyone who have cars with engines above 2000cc in the diesel category. Toyota are whining more because the majority of the sales come from that segment and they were happily trundling along without making any effort to improve the other segments of their sales.

If they can bring a 1.9 or below version, it could have been used for the Corolla as well. Else talk with the government along with other manufacturers and resolve this issue amicably.

As much as I love Toyota for their reliability and TCO, can't help but think that they don't have that commitment/attitude towards India. It just doesn't show in their product line up or the pricing.

Toyota needs India more than India need them. Don't think they will be willing to shut off and leave a rapidly growing market.

Originally Posted by tsk1979

First of all, there is no law. Its a judicial decision. Secondly, just because it affects others does not make it right.

So, why worry? It was a judicial decision and it can be reversed anytime, I suppose? I am not saying it is right, I am just saying Toyota could try a different approach than cry in the streets.

[tsk1979]

Originally Posted by SchumiFan

The law isn't necessarily affecting Toyota alone, is it? It applies to everyone who have cars with engines above 2000cc in the diesel category. .

First of all, there is no law. Its a judicial decision. Secondly, just because it affects others does not make it right.

[Vid6639]

Originally Posted by SchumiFan

The law isn't necessarily affecting Toyota alone, is it? It applies to everyone who have cars with engines above 2000cc in the diesel category. Toyota are whining more because the majority of the sales come from that segment and they were happily trundling along without making any effort to improve the other segments of their sales.

It's not just Toyota whining. Mercedes is going through a tough time as well as their entire lineup of cars cannot be sold in NCR.

If they can bring a 1.9 or below version, it could have been used for the Corolla as well. Else talk with the government along with other manufacturers and resolve this issue amicably.

Today 1.9, What's to say the the law is revised next year to 1.6L? Then what?

Toyota needs India more than India need them. Don't think they will be willing to shut off and leave a rapidly growing market.

Ofcourse not. They won't shut shop but what this means is they will be even more watchful of new products. Finally the customer will suffer.

They might not even consider future products just cause of the risks involved with regulations. Same with other manufacturers who will now reconsider future investments.

[shivs2003]

I genuinely find the SC decision to be not thought out. Vehicle manufacturers invest thousands of crores in R&D. They set up a supplier base, their ancillaries set up units and make their own investments.

New Delhi is one of the biggest cities in India, unlike smaller and far more congested cities in India such as Kolkata and Bombay, Delhi has a very large potential to maintain every single vehicle and yet keep pollution in control. The following areas need to be worked upon rather than banning cars>2000 cc:

1. Public Transport. Yes, Delhi has the metro and many other public transport systems. The reality is, it's nowhere near adequate. A bulk of people in Delhi travel daily to surrounding areas, Faridabad, Gurgaon, Manesar, Noida etc for work. These are the people with Diesel cars as they have a long commute. I travel a daily of 150 km to go to my place of work in the outskirts of Faridabad from South Delhi.

2. Pollution Check. Delhi has a horrible pollution checking system. Its practically non existent. The checking guys barely do anything. They just take the money and print your vehicle details in the paper and hand it to you.

3. Old Diesels: Yes, a car scrapping scheme is required. Old, badly maintained diesels are genuinely bad.

4. Non Diesels: Bikes, Autos, Buses. No matter fuel they run on, if not maintained, or serviced at the right times, will pollute. I dont want to politicize the issue, but a good amount of vote bank politics is being played especially on this point.

5. Genuine Disincentive: There should be a genuine disincentive for polluting the city. And a few active measures which do not alienate those who have no other option but to use a vehicle should be implemented.

[Speed Pujari]

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[srishiva]

With laws/legislations, there is scope for lobbying (its good and bad). There is listening to the constituencies with economic impacts etc. They also dont happen suddenly.

Judicial decisions where there are no laws are different and people feel helpless and long term plans can get wiped off.

[Motard_Blr]

On the one hand we have accusations of judicial overreach. While I understand the intention behind some judgements of courts that orders the government to do something specific such as banning diesel vehicles over 2000 cc, imposing ABS on LPG delivery trucks in KL (http://www.team-bhp.com/forum/commer...rting-lpg.html), the specific order doesn't appear to be well thought out and also encroaches on the executive's powers.

In the Delhi diesel car ban, why have they said 2000 cc? Why not 1000 cc or 3000 cc? Is the 2000 cc threshold based on any verified data that shows that most of the pollution from diesel cars are caused by vehicles over 2000 cc? The same court that recently struck down the TRAI proposal of penalising mobile operators for call drops saying that it was completely arbitrary had imposed this 2000 cc order. Naturally this order favours some parties and hard limit of 2000 cc was quickly exploited by Mahindra for its XUV. In KL, I wonder how the HC come to the conclusion that a significant number of accidents of LPG trucks could have been avoided if the vehicles were equipped with ABS?

On the other hand we have government inaction or overaction. Inaction: Delhi air becoming visibly polluted and neither the centre nor the state governments doing anything to control it. Overaction: taxes on transactions with retroactive effect (Vodafone deal, Cairns deal, etc.). Both these situations cause anguish to us citizens and lead to situations where court orders are claimed to be judicial overreach.

In this environment where the main actors of our democracy are not doing their respective jobs properly, any investor would worry about the safety and returns of their investment.