Toyota Suspends Diesel Launches in India

Toyota Motor Corp. says India’s widening ban on diesels that displace more than 2.0 liters has prompted it to suspend plans for any new models that are powered by such engines.

India imposed the ban in January for the metropolitan Delhi and has since expanded it to the southern state of Kerala. The two markets account for about 8% of Toyota's India sales of the larger engines.

The government embargos are intended to help improve air quality. But Toyota, like other diesel makers, says such initiatives should target older vehicles with high-polluting diesels and not new models that are considerably cleaner. “We feel our vehicles are being targeted,” says Shekar Viswanathan, TKMPL’s vice chairman.

Toyota controls about 20% the Indian market for passenger vehicles powered by large diesels. Its best-sellers in that segment include the Fortuner midsize SUV, Innova small MPV and Land Cruiser Prado and 200LC large SUVs. Last year those vehicles generated sales of roughly 80,000 units in India.

Toyota's overall sales in India rose 5% to 139,800 units in 2015. But deliveries last month.plunged 23% to 9,500 year on year. The company says it is moving ahead with plans to open a new diesel engine plant near its assembly plant in Bidadi, in June. The factory will have annual capacity to make 100,000 next-generation “clean” diesels that displace 2.4 and 2.8 liters.