Automakers rethink launches after diesel clampdown

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While the recent Supreme Court ruling has discouraged car makers from making new investments in diesel capacity and technology, it has also now put the fate of new launches in limbo. Vehicle manufacturers, who had lined up new model launches with large diesel engines, might now be revisiting their plans with voices against the emission of the cheaper fuel gaining traction.

Toyota Kirloskar Motor, for instance, which had promised to bring the large multi-seater vehicle HiAce to India, did not meet its launch deadline of 2015. The 10-seater HiAce, which is sold in around 140 countries, is a luxury van developed to complement Toyota’s highest-selling model Innova. The model, which was set to debut in India in the second half of 2015, is powered by a 3,000-cc diesel engine, higher than the stipulated limit allowed to sell in Delhi.

While an e-mail questionnaire sent to Toyota went unanswered, a company source said there were no immediate plans to launch the HiAce in India. Toyota Innova, India’s largest-selling premium utility vehicle, is at the receiving end of the SC ban, which manufacturers and market experts believe could get extended to the rest of the country. Swedish car brand Volvo has decided to phase out the existing S80 premium sedan in India, though the model had got a new engine globally in mid-2015. Volvo will now replace the S80 model with S90.

The sudden change in policies has taken the auto manufacturing fraternity off-guard. In addition to the Society of Indian Automobile Manufacturers (Siam), companies have also approached the Supreme Court individually seeking a review of the decision. Rakesh Srivastava, senior vice-president (sales and marketing) at Hyundai Motor India, said, “A product introduction is capital-intensive and needs a minimum threshold time of two to three years for the full development cycle.”

Manufacturers are even exploring the idea of downsizing the engine capacity to below 2,000 cc to suit the new norms. However, that will be capital-intensive and time-consuming as manufacturers will have to ensure performance of the vehicle does not get impacted in the process.

  • SC’s ban on diesel vehicle sale has discouraged manufacturers in making diesel engine investment

  • New scheduled launches with large diesel engines may get impacted

  • Manufacturers may opt to go slow on all types of diesel development due to unclear policies

  • Manufacturers will explore the idea of re-tuning their diesel engines to suit norms

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