Toyota plans to stop selling diesel cars except larger utility vehicles post BS-VI

by Madhvi Bansal

Toyota Kirloskar Motor India has planned to stop selling diesel cars post the new BS-VI emission norms. This new emission standard will come into effect in April 2020 as the brands are yet to absorb the effects. Toyota, the Japanese carmaker, in association with the Kirloskar group has been selling cars in India since 1997 under the common brand Toyota Kirloskar Motor (TKM).

Moving forward, Toyota Kirloskar Motor has taken this huge decision to stop selling cars that come under the budget segments with 1.3-liter diesel engines. The version includes the Etios series – Etios Sedan and Etios Cross; Liva and Corolla Altis. As per sales reports, the overall sales of 85 percent for Toyota Kirloskar Motor come from the diesel variants including the larger utility segment. Considering the sales report, this may appear to be a huge leap but considering the cost of transition to a new emission standard compliant diesel engine, it is indeed a calculated decision to phase out few models in the small engine segments.

BS-VI norms control harmful vehicle emissions

As a part of the global transition to vehicle emission standards, India has decided to frame its version to control and monitor emissions from vehicles. These standards have been into effect ever since the year 2000 and the first standard was named ‘India 2000’ and it was followed by Bharat Stage II, Bharat Stage, Bharat Stage VI and directly moving forward to implement the new version Bharat Stage VI skipping BS-V. BS in BS-VI stands for Bharat Stage and VI or 6 is the latest emission standard that is to take effect next year from April 2020. Post-April 2020, vehicles that are compliant with the latest BS-VI can only be sold in India. This is considered a huge leap as far as improving the air quality index is concerned. This standard applies to both diesel and petrol engine vehicles. This standard aims at reducing the pollutions levels by having a check on particulate matter, NOx and hydrocarbon levels in vehicle emissions. With the new standard being implemented in April 2020, these levels are likely to be controlled to a large extent.

Transition to BSVI is not viable for Toyota India

When it comes to petrol engine vehicles, the transition to the newer emission standard is considered viable as it needs to reduce only NOx emission levels. But to achieve the same feat in diesel engines, Toyota Kirloskar Motor has to include a whole lot of filters and technological advancements which is basically to build a newer diesel engine. Switching over to BSVI compliant engines, the price of budget segment cars such as Etios, Liva, and Corolla Altis may increase by around 20 to 25% as per sources. Also, every new vehicle post-BS-VI should carry a portable emission standard measuring device and this will add more cost and again considered not a viable option for smaller diesel engine cars. The difference in fuel prices between petrol and diesel has also reduced significantly in recent years. This has also prompted Indian buyers to choose the petrol variants to decrease the sales volumes in Toyota’s small segment cars.

The decision to phase out a few models of smaller segment diesel engines post the new emission standard considering the cost has also been seen in several other brands in India. Even one of the bigger players in the Indian market like Maruti has decided to phase out a few models and sell only the petrol variants post-April 2020. Brands including Renault India and the newly entered MG motor India have also decided to stop selling small diesel vehicles.

Larger utility vehicles to continue with diesel engines

While Toyota Kirloskar Motor had planned to stop selling diesel variants post new emission standards BS-VI, it will continue to make and sell larger utility vehicles. This has even been confirmed by the brand itself citing the growing demand for particular premium diesel engine variants, Innova Crystas and Fortuners. These MPV and SUV segments in diesel variants are here to stay because there is growing demand and expected to continue in the future post new emission standards. Even though the transition to newer BS-VI comes with a huge cost, Toyota Kirloskar Motor is looking to continue citing the brand’s overall sales of utility vehicles accounting for more than 60 percent. Toyota has also been trying to transform itself into new hybrid technologies not just in India for the future.