Diesel ban could mar Toyota’s India expansion plan: Tachibana

A ban on diesel engines in India's capital Delhi has hit Japanese carmaker Toyota the hardest as Delhi remains the top market in India for the company's top-selling SUV model, the Innova.

Akito Tachibana, the newly-appointed managing director of Toyota Kirloskar Motor, the Indian arm of the Japanese auto giant, says he is concerned about the direction of future investments in India.

A ban on diesel vehicles combined with the central government's policy of limiting use of polluting fuels either through outright bans of through pricing policies, has left diesel engine makers directionless.

The diesel ban if applied across the country, could undermine growth of auto industry in India's fast growing market, which was touted to become the world's third largest automobile manufacturer.

What is hurting Toyota more is the ban on registration of new diesel cars in Delhi with engine capacities of over 2000 cc, which has been in force since last December.

For Toyota, which counts Delhi as an important market with nearly eight per cent sales of its top-selling Innova model, the ban on bigger cars in Delhi is a big blow.

Delhi's diesel ban has affected other automakers as well, including Mercedes-Benz India and Mahindra & Mahindra.

According to Tachibana, Toyota has been the ''most affected'' by the Supreme Court order of 16 December, which he says, has also resulted in the ''removal of a level playing field'' for automakers.

Growth in India business operations will be a tall order given the ''fear or risk of unreasonable restrictions on doing business in India that may be imposed on us suddenly by any statutory authority,'' adds Tachibans.

Toyota, he said, is fully compliant with all requirements mandated by Indian laws and is planning long-term investments accordingly.

''We are agreeable to adopt any policy change if introduced with consultation and a clear roadmap as it recently occurred in adoption of BS VI emission standards,'' says Tachibana.

According to carmakers, the best way to reduce emissions from diesel vehicles is to replace older BS I, BS II and BS III vehicles operating on roads in a phased manner. ''We are ready to play our role as a strategic partner in such an initiative,'' says Tachibana.

The SC is scheduled to hear the case on Monday, and the automobile industry is hopeful that the apex court will adopt a more accommodative stance.