Toyota expects 15-20 % rise in diesel model prices after BSVI upgrade, seeks cut in GST rate
New Delhi | Jagran Biz Desk: Japanese carmaker Toyota Kirloskar Motors expects prices of its diesel model vehicles to increase by 15-20 per cent with BS VI emission norms, i.e., set to kick off from next year, said a company official.
The company also stressed that in order to boost growth in the auto industry, it is important to come up with long term structural solutions like slashing GST rates.
"We expect a price rise of 15 to 20 per cent in our diesel vehicles with the transition (BS IV to BSVI)," TKM Deputy Managing Director N Raja said.
Besides, the adverse exchange rate is making the company contemplate an impending price increase, which it has been holding as of now, he added.
Majority of Toyota's popular models such as Innova and Fortuner are sold in diesel variants. Based on the company's total vehicle sales from January to July 2019, the current diesel-petrol ratio stands at 82:18.
However, considering only the passenger car segment, the petrol-diesel ratio is close to 50:50.
Raja said that amid the slowdown, manufacturers and dealers were doing their best to offer deals to encourage customer demand.
"Discounts are offered by industry basis multiple factors like region specific festivities, product life cycle, seasonality etc. However, these are just transient measures and what we need at this moment are permanent solutions," he added.
Raja said the industry has been facing tough times since last few months with increasing pressure of low customer sentiment.
"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 noted.
Automobile and component manufacturers have been seeking GST cut on automobiles to 18 per cent from 28 per cent to help the sector come out of a prolonged slump that has resulted in job losses.
The next GST Council meeting will be held on September 20 in Goa.
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, it added.
Posted By: James Kuanal