Toyota could set up diesel engine plant post-budget

Well known auto giant, Toyota Motors is thinking to set up a diesel engine plant in the country after examining government’s policy verdict on subsidy to the fossil fuel at some stage in the upcoming budget in the month of March 2012. The Japanese car maker, which is currently in collaboration with the Kirloskar Group, is now investing a whopping amount of Rs. 500 crore in building up a petrol engine plant and intensifying its transmission capability in Bangalore. According to the Deputy MD of Toyota Kirloskar Motors, the company is now waiting for the budget and only after that the firm will see if it is feasible to set up a diesel plant in the country or not.

He also mentioned that the company will wait until there is some precision on the policies related to persistence of financial assistance on diesel cost.Toyota Motors is well aware of the heightened demand for the diesel cars in the Indian car market, particularly for its two car models, Toyota Etios sedan and Toyota Etios Liva hatchback. In the year 2011, the company managed to sell about 63,575 units of Etios twins, out of which about 70% were diesel variants.

Even India’s largest car maker, Maruti Suzuki India is waiting for the clarity on the policies and only then it will move on with any new investments on the diesel engine segment. The CEO and MD of Maruti Suzuki India mentioned that the company at this point of time will not go ahead and do a big investment unless there are some precision on the policies. On an average the investment of about Rs. 1000 crore is required to set up a diesel engine plant, which would produce about 1,00,000 units every year. Therefore, it is pretty obvious that without clarity on policies, there is no way that company would invest a whopping amount of Rs. 1000 crore.

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