Why alternate fuel-powered cars make great sense for Toyota in India
India is one of the leading importers of crude oil in the world. And a fast booming automotive market is expected to further increase demand for petroleum products which, of course, will add to the burden on the exchequer. The central government is wary of this and has been giving impetus to alternate and blended fuel technologies, something that Toyota has a solid expertise in.
India's crude oil import in 2022-23 cost around $158.3 billion, up from $120.7 billion in 2021-22, according to data from the oil ministry’s Petroleum Planning & Analysis Cell (PPAC). Ethanol or other blended fuel can potentially bring down this cost while also having the added advantage of being friendlier for the planet. At a time when fully-electric vehicles (EVs) are the talk of the town, Toyota Kirloskar Motor (TKM) believes that the path of alternate fuels is a viable one.
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TKM unveiled the country's first Ethanol-ready flex fuel hybrid car in November of 2022 and currently has a diverse powertrain portfolio that includes petrol, diesel, CNG and strong hybrid models. And the brand is in no rush here to dive into the fully-electric space. “As far as cars as concerned, small cars - something like intra-city taxi is viable for electric right now, but for majority of cars, whether private or fleet, the choice really goes back to either using an alternate fuel like ethanol or electrified approach through strong hybrids," Vikram Gulati, Country Head and Senior Vice President, told HT Auto during a recent chat. “We are well endowed in excess food grains and waste that can be converted into energy, as well as solar and wind. These energy pathways become relevant for India."
Gulati further explains that biofuel ‘can be immediate (and) most impactful energy pathway that can have max impact in shortest period of time.’
For many car manufacturing brands, scale is also crucial and if projections are not too optimistic about selling a certain number of units every financial year, a particular powertrain or even a specific model may not make great business sense. “Our statement of intent has always been to look at mass electrification, thus you need to localize and bring down cost of EV parts, and then only you can have any impact from this pathway'" he said. “Globally if you look at it, by 2030, we are saying that out of 10 million new vehicle sales, around 3.5 million - almost size of Indian car market last year - is going to be pure electric. Around 5.5 million is going to be plug-in or hybrid or some variation of that."
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But TKM is still keeping a close watch on how the electrification process takes place in the country and Gulati admits that it is quite encouraging. “Electric car segment has taken off pretty well. There are many more models now available in different segments at different price points. Rise in last two or three years has been quite sharp. But the segment still really remains nascent with just one per cent of the total car sales."
And for now, TKM is quite content in the positive response the company claims it has for its newer models and the strong demand for its existing lineup. The company recently launched models like the Urban Cruiser Hyryder, Innova Crysta Hycross and Hilux while the likes of Innova Crysta and Fortuner remain solid performers. Riding on these models, the company posted its best-ever monthly sales figure of 20,410 units (domestic + exports) in May. Gulati admits that the waiting times can be brought down further still for customers even as he underlines the need to give value proposition to the market at large.
