Toyota Kirloskar Motor (TKM), the maker of popular utility vehicles — Fortuner and Innova — expects prices of its diesel models will go up by 15-20 per cent with BS-VI emission norms kicking in from April 2020. Majority of Innova and Fortuner are sold with diesel powertrains.
There would be a price rise of 15 per cent to 20 per cent in TMK’s diesel vehicles with the transition of BS-IV to BS-VI emission norms next year, TKM deputy MD N Raja said, adding the adverse exchange rate is making the company contemplate an impending price rise, which the company has been holding as of now.
To bring back growth in the auto sector it was important to have permanent and long term structural solutions like reduction in Goods and Services Tax (GST) rates for automobiles, according to the company. Automakers and association bodies have asked the Centre to provide a 10 per cent relief on GST rates to revive sales in the sector. Automakers have high expectations from the next GST Council meeting to be held on September 20 in Goa.
Raja said the auto industry has been facing tough times since last few months with increasing pressure of low customer sentiments. “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 a positive momentum in customer demand in the auto industry,” he said.
TKM, however, expressed hope that the government’s recent clarification on future of owning BS IV vehicles will help mitigate apprehensions of customers who were sceptical of buying such vehicles.
The pre-buying of BS-IV vehicles, which will undergo a substantial price hike post BS-VI transition, would help stimulate positive sales momentum in the industry, said the company, which is a joint venture between Japanese auto major Toyota and Kirloskar group.
Meanwhile, TKM registered a sale of 10,701 units in August 2019, witnessing a decline of 24 per cent in domestic volumes, as opposed to 14,100 units sold in August 2019. Its total sales (domestic and export) for the lasy month stood at 11,544 units, a drop of 14,581 units over the same period last year.
Ways to bring back the auto sector on track
To bring back growth in the auto sector it was important to have permanent and long term structural solutions like reduction in Goods and Services Tax (GST) rates for automobiles. Automakers and association bodies have asked the Centre to provide a 10 per cent relief on GST rates to revive sales in the sector.