Pre-buying of diesel vehicles ahead of BS-VI implementation may help arrest sales decline: TKM

Toyota Kirloskar Motor expects pre-buying of diesel vehicles later this year ahead of the implementation of BS-VI emission norms in April 2020 to help arrest the ongoing decline in sales, according to a senior company official. With prices of diesel vehicles expected to increase in the range of 15-20 per cent due to BS-VI compliance, the company is looking to tap advanced purchases by fleet operators and shared mobility players.

When compared to petrol, diesel vehicles involve more technologies to control particulate matter to meet BS-VI norms, which means there will be 15-20 per cent increase in prices of diesel products, Toyota Kirloskar Motor (TKM) Deputy Managing Director N Raja told PTI. "Considering this, we expect the market to become better during the transition. People may be happier to pick up BS-IV cars than wait for BS-VI," he added.

Citing the company's example, he said while final pricing details are yet to be worked out across TKM's product range, there could be a price increase of around Rs 4.5 lakh on a diesel Fortuner SUV that is priced around Rs 30 lakh at present. Raja further said, "We are looking at the fleet segment and employee transport and shared mobility, where diesel vehicles are used and there is price sensitivity. They would be better off buying BS IV than going for BS VI."

He said TKM is "trying to educate our customers, particularly in fleet and employee transport, shared mobility, tell them the cost increase that is going to come and try to provide them solutions accordingly, either BS-IV or BS-VI, to suit their needs". With such pre-buying, he said, "What we see is that going forward, we will catch up some numbers...with the overall annual numbers about 5-8 per cent less than last year."

In 2018-19, the company reported 7 per cent increase in domestic sales at 1,50,525 units from 1,40,645 units in 2017-18, Also for the industry, he said, "Current decline is in double digits but with people coming in to buy ahead of BS-VI, it may help arrest the decline to single digits."

At present, Raja said for the industry, passenger vehicle sales are down by 15-18 per cent whereas for TKM these are down by 10-12 per cent. TKM's all models will be ready for BS VI by the scheduled time, he said, adding by around January-February next year the company will be ready to supply such vehicles across India subject to fuel availability.

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