Toyota Industries Engine India (TIEI) has opened a ₹1,100-crore plant near Bengaluru to manufacture diesel engines at a time when the National Green Tribunal has identified 12 more cities for extending the ban on diesel cars with over 2 lt engines. In an interview with BusinessLine, the company’s Deputy Managing Director T R Parasuraman shares TIEI’s plans for the country.

Setting up a diesel engine plant seems like a brave attempt on your part at a time when there is a ban on diesel vehicles. The NGT has also identified 12 more cities for the ban. So, will this plant be used for exports as well?

We believe that the ban on higher capacity diesel vehicles is a short-term phenomenon. Logically speaking, diesel technology is improving leaps and bounds.

CAFÉ (Corporate Average Fuel Economy/Efficiency) regulations will see some stiffer norms coming in by 2017. From that perspective, every automaker has to do a balancing act between diesel and gasoline, whether we like it or not. While we are supportive of the government’s initiative to control pollution - the move to BS VI, etc., we need to go into the root cause of the problem as not just diesel vehicles, even gasoline vehicles are polluting. This plant makes 2.4 and 2.8 litre engines, and as of now, we will supply engines only for Crysta in India.

Are you ready to move to BS VI emission norms with these engines?

The engines we are currently producing are compliant with BS IV or Euro 1V standards. We can ramp up to BS/Euro V and BS/Euro VI with minimal investments and lead time, because we already have the technology in place.

Moving to higher standards would mean upgrading some parts like catalytic converters, some retrofitments, etc. We have similar plants in Thailand and Japan. So these technologies are already available there and they are using it.

BS VI fuel also needs to be made available by 2020, by which the government plans to implement BS VI norms. I am sure the government will be working on this seriously.

If Toyota is seriously looking at ramping up on hybrids, where do diesel engines fit in, in your path?

Hybrid is getting popular now. Technology is also getting globalised. Only that it is currently very expensive. That’s why the government has to give a strong support in terms of incentives.

Going forward, India has a big potential for hybrids. We tested the Prius. Then we launched the Camry Hybrid, which is a very successful model here.

Reports suggest that by 2050, Toyota plans to phase out gasoline engines in favour of hybrids and fuel cells except in a few developing countries.

Every engine has its own life. For engines and transmissions, the life cycle is quite long – around 10 to 15 years. And 2050 is reasonably far off. But I am sure India is a heterogeneous market.

It will not change so much overnight. You still see Ambassadors and Fiats. To go for complete changeover, it will take lot of time.

But we are definitely in the right direction, be it government policies or technology enhancement.

Coming to technology, we understand that Toyota is preparing for a sweeping powertrain makeover…

We are actually looking at its flexibility which means common parts and we will have a global supply chain which will help us achieve economies of scale.

Therefore, it will be more modular; like a cassette system, you can keep on adding. If you look at our new engines, it is much more efficient in terms of fuel efficiency, horse power, emissions, etc.

What is the capacity in this plant right now? How much will you be able to save in terms of costs and what will be the fuel economy of these engines.

These engines will be 15 per cent more fuel efficient and have 45 per cent more power. It is a bit too early to say what will be the costs savings.

We can produce about 9,000 engines per month, but as of now, we can make about 7,000. We should be able to peak in another four months as Crysta is seeing some very good sales.

M&M has come out with 1.9 litre engine to beat this ban. Since you also have other smaller vehicles with diesel engines, are you looking at making engines locally to get around this issue?

Toyota is pretty clear about this. We will not downgrade the size to work around the ban. For other smaller vehicles, we have no plans at this point in time to build engines locally.

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