The lingering uncertainty on sale of high-end diesel vehicles in the national capital region has come as a big blow to Japanese auto major Toyota's "confidence in India", forcing its domestic unit to rework its plans.
"Toyota Motor's confidence in India has taken a big knock after the Supreme Court ban since mid-December last on sale of high-end diesel cars and SUVs, and the continuing uncertainty... is only adding to it. But it is our job at Toyota Kirloskar Motor to reinstate that confidence," TKM Vice-Chairman Shekhar Vishwanathan said here over the weekend.
Stating that "the element of trust has been broken" between Toyota and the country as a whole, he said "it has become very difficult to launch new products or commit fresh investments. This is in spite of the fact that we have been producing vehicles complying with all the norms laid out in the country from day one".
"If we were to go and ask the headquarters for new products, they would ask how do you know it will not get banned? And I have no answer. So, my first step is to make sure the ban gets lifted. If that means paying a nominal cess, so be it even though we don't believe the cess is a fair idea," he asserted.
On December 16 last year, the apex court banned sale of all diesel cars/SUVs with an engine capacity of 2,000 cc or more till March 31. It then extended the ban till April 30. As of now, there is no final word on when the SC will conclude the hearing and issue a final order.
Toyota models — the Innova, Fortuner, Land Cruiser and Prado - except the Corolla and lower-end models have taken a hit. The ban has also upset all calculations for Mahindra, Tata Motors, Toyota and Mercedes.
M&M tried to work around the ban as it launched existing vehicles with down-sized engines within a month of the SC order.
For now, Toyota is playing along. The Innova Crysta is the first launch following the Supreme Court restriction.
The Bengaluru-based Toyota Kirloskar Motor last Friday rolled out the Innova Crysta, an all-new model of its best-selling Innova nationally except in Delhi because of the court imposed ban. Delhi-NCR is the single-largest market with more than 8 per cent of total sales for Toyota.
The Innova Crysta is built on a new platform and comes with two engine options -- 2.4 L and 2.8 L -- apart from offering an 8-seater option as well.
The ban has also forced the company to look at launching a petrol variant of all its high-end vehicles, including Innova Crysta, even though its past attempts have not been successful.
"It is not so much about the ban per se. Okay, we will lose some money, that's fine. But the more moot question is why such an unfair ban is in the first place when we have complied with every law? That is what is hurting. This is not an arithmetic loss," Vishwanathan said.
Maintaining that there has to be legal certainty for businesses to establish and grow, he said unless this is established, "everyone's perception will change about the country. They will keep asking can the law be reinterpreted again even when you are compliant and you can be banned, suddenly bringing my business to a standstill".