Post the implementation of BS-6 emission regulations, Toyota Kirloskar Motor (TKM) predicts that the prices of its diesel models will increase by 15-20 per cent. The Japanese automaker, which currently sells utility vehicles such as the Fortuner and Innova Crysta with a ratio of 82:18 in favour of diesel derivatives, believes that in order for the auto industry get back up on its feet, GST reduction is of paramount importance. Going by Toyota's prediction, if the prices were to increase by a maximum of 20 per cent, the cost of the top-spec trim of the Fortuner, which currently costs Rs 33.60 lakh (ex-showroom) will increase by Rs 6.72 lakh taking the variant's price up to Rs 40.32 lakh. Similarly, for the top-spec Innova Crysta, which currently retails at an ex-showroom price of Rs 23.47 lakh, prices could go up by Rs 4.69 lakh, taking the MPV's asking price to Rs 28.16 lakh.
The difference in price will not be as adverse in the case of the petrol derivatives. For Toyota's offerings in the passenger car segment which includes the likes of the Etios twins, Yaris sedan as well as the Corolla, the ratio for petrol-diesel in terms of sales stands at 50:50. The auto sector in India is currently witnessing one of its biggest slowdowns. The demand has been lacklustre due to a substantial increase in vehicle prices along with changing customer sentiment. The auto industry has been continuously pitching the idea of GST rate cuts from the current 28 per cent to 18 per cent to the Finance Ministry to improve the conditions ahead of the BS-6 transformation to prevent the further downfall of the sector. The ministry is expected to make an announcement regarding the same after the next GST meeting which is scheduled to take place on September 20th in Goa.
TKM Deputy Managing Director N Raja told PTI "With sentiments muted, people are deferring their purchase of vehicles, exchange rate depreciation is not helping us. We seek long term structural changes like rationalisation of GST structure for positive momentum in customer demand in the auto industry,"
The Finance Ministry has recently announced a revival package for the auto industry. Included in the same was the assurance that BS-4 vehicles, be it petrol or diesel, purchased before the April 1st deadline will continue to remain operational for their respective registration periods. TKM believes that this could initiate pre-buying from customers ahead of the price increase which should ideally provide some relief.