The Indian arm of Toyota is supposed to have asked the parent company, Toyota Motor Corporation to consider setting up a diesel engine plant in India. The consideration has been made by Toyota considering the rapidly increasing demand for diesel powered vehicles in the Indian market. In addition to that, the Government also announced in the Budget 2012-13 about no additional taxes on the diesel powered vehicles.
A source close to the company said that in the face of rising demand for diesel vehicles in the Indian market, it is constantly becoming difficult to keep up to demand. This demands for more localization for which Toyota Kirloskar Motors has requested the Toyota Headquarters to set up a diesel plant. So far Toyota has not come to any conclusion on this proposal. However, the Indian arm expects that the response from Toyota will be positive.
Toyota Kirloskar Motors has seen the surge in diesel demand post the launch of the Etios compact sedan and the Etios Liva hatchback. In 2011, Toyota Kirloskar Motors sold 63,575 units of the Etios and Etios Liva of which 70% were diesel variants. Toyota Kirloskar Motors is also investing an additional Rs. 500 crores to setup a petrol engine and transmission assembly plant near Bangalore.
