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Toyota to taper Etios, Liva production

K Giriprakash Bengaluru | Updated on August 09, 2019 Published on August 09, 2019

Both the Etios and Liva were launched about nine years ago   -  GRJGM

BS-VI norms cast a shadow over carmaker’s model line-up for 2020

Toyota Kirloskar is set to taper production of its Etios sedan and Liva hatchback ahead of the introduction of BS-VI norms by 2020.

The road ahead for the carmaker’s bestsellers, the multi-purpose Innova and high-end SUV Fortuner, is uncertain. “Once we adopt BS-VI norms, we will decide on what we should do with the models as the adoption of the new norms will result in a price increase of the cars,” Shekar Viswanathan, Vice-Chairman of Toyota-Kirloskar, told BusinessLine.

Production of the Innova and Fortuner will be cut after the end of the festival season.

With the Etios and Liva on their way out, it might become difficult for their biggest customers, Ola and Uber, to look for an immediate alternative though Toyota has assured them that servicing and replacement of components will continue to be available.

Both the Etios and Liva, two made-for-India models launched about nine years ago, are currently being manufactured at Toyota’s second plant, running at 40 per cent of its capacity of 2.1 lakh units. The first plant, with a capacity of one lakh units, manufactures the Innova and Fortuner models.

The domestic auto industry has been witnessing an unprecedented slowdown with most carmakers recording a 25-30 per cent reduction in production. Toyota said that its sales last month were down nearly 25 per cent. In July, the carmaker sold 10,423 units compared with 13,677 units for the same period in the previous year. Toyota said the high insurance costs, the hike in taxes, the liquidity crunch across the NBFC segment and tightening of lending norms have significantly affected its India sales in the last few months.

The industry itself has seen nine straight months of a production slowdown. According to various estimates, automakers and dealers have laid off over 3.5 lakh workers so far.

No layoffs

But Toyota, which runs a joint venture with Kirloskar Systems in India, said it will not lay off any of its 6,000 or so permanent workers. “We created these jobs and will protect them,” Viswanathan said. He said customers are wary of buying BS-IV models as they will attract deep discounts once the current norms get phased out. “There is a bit of BS-IV- BS-VI conundrum out there and hence till such time there is enough clarity, we would like to hold our horses.”

Per an arrangement with another Japanese carmaker, Suzuki, Toyota will start manufacturing Maruti-Suzuki’s Vitara Brezza from 2022. It also plans to transfer hybrid and electric vehicle technology to Suzuki to power their small-car portfolio.

“We are committed to adhering to government regulations and that takes precedence over everything else,” he said. The Qualis, which preceded the Innova, was also phased out at the height of its success. He said Toyota would focus on hybrid models though there will be some amount of business coming from e-vehicles.

Published on August 09, 2019
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