Auto Zone: ‘After hybrid, more green options’

Toyota Kirloskar Motor (TKM) has maintained its sales momentum, achieving ‘new milestones’ in the last fiscal year. Vikram Gulati, country head and executive vice-president for corporate affairs and governance, and Sabari Manohar, vice-president, sales-service-used car business, share the company’s plans with Vijay C Roy. Excerpts from the interview…

Last year was pretty good for passenger vehicle makers. What were TKM’s sale figures?

During the 2023-24 financial year, Toyota Kirloskar Motor had record sales of 2,63,512 units, marking a growth of 48 per cent compared to the preceding year’s 1,77,683 units. The SUV and MUV segments were our biggest contributors, with models like Innova Crysta, Innova HyCross, Fortuner, Legender, Urban Cruiser Hyryder, Hilux and LC300. Other product offerings such as Camry Hybrid, Glanza, Vellfire and Rumion, too, have fuelled the company’s upward sales trend.

What is the current production capacity and are you looking to expand?

Currently, we have two plants at Bidadi in Karnataka. The total production capacity is around 3,45,000 units. A few months back, we announced the start of the third plant within the same facility, having a capacity to manufacture 1,00,000 units. This is coming up at an investment of Rs 3,300 crore, which is just the cost of the plant.

When will the new unit in Karnataka be operational?

Likely by 2026.

How many hybrid models is TKM offering at the moment?

We are offering strong hybrid options in HyCross, Hyryder, Camry and Vellfire. As far the mild hybrid option is concerned, we are offering it in Glanza, Rumion and others.

Recently, you launched Taisor, based on Maruti Suzuki Fronx. Which are the categories you are targeting?

In general, we continue to study the market and customer requirements such as his or her occupation, kind of usage, and current trends. At this point of time, there is a huge variation in terms of customer requirement. This year, there is an increased focus on the SUV category and we see the momentum continuing.

How has been the cross-badge experience with Maruti Suzuki?

This is basically the synergy between two brands in terms of understanding each other and working on the positives of the brands. There was an overwhelming response when we launched Glanza, followed by Urban Cruiser. Recently, we launched Taisor. Of course, we have Hyryder.

When you talk about strong hybrid, how have been the sales figures?

Sales of both mild and strong hybrids have been very positive. Hybrid has its own advantages in terms of silent cabin drive and excellent fuel mileage. Also, it is enjoyable to ride both in the city as well as on highways. So, in terms of acceptance by the customer, it’s been very positive. In terms of policy support, there has been incentivisation by governments, which differs from state to state.

One must understand that a strong hybrid is basically a self-charging electric vehicle. Since it has both an electric powertrain as well as a traditional gasoline powertrain, the gasoline powertrain is very advanced, more efficient and does away with the issue of charging anxiety. Consumers can get 40-50 per cent savings in terms of fossil fuel, plus it results in a very significant decrease in carbon emission.

So, it’s a very clean technology and with state governments or UTs like Chandigarh re-aligning their policies to promote cleaner technology, we believe the consumers will have a stronger motivation to go for a greener choice.

There has been a lot of push by the Centre on electric vehicles. How do you see the market for EVs in India by 2030?

Different people have a different take on that. The Niti Aayog 2022 study forecasts that by 2030, the percentage of private electric cars will be 11-13 per cent. So, the bottomline is that adoption is happening at a rapid pace worldwide, but challenges remain. Even if you look at Europe and USA right now, they too are facing challenges.

When are you planning to introduce battery vehicles in India?

As far as Toyota is concerned, the journey with electric vehicles begin almost 30-32 years back, probable in 1992-1994, when RAV 4 electric was introduced in the North American market. The electric vehicle then had severe adoption challenges around cost, charging time and charging range anxiety. Not giving up the technology, what was innovatively brought out was the strong hybrid, which did away with charging anxiety. It also brought down the most expensive components in the electric powertrain, the battery, to a fraction of the size. One can carry the energy in the conventional way, but use the electric powertrain smartly.

Our vast experience has given us tremendous knowledge and improvement capability. Today, the company has leadership in all powertrains. We have the technology whether it’s a battery EV, strong hybrid or plug-in hybrid, or the hydrogen vehicle (fuel cell vehicle).

No two markets are the same and you have to look at societal needs, which include the energy mix of the country as well as the infrastructure readiness. Then there’s the consumer acceptability for green technology, per capita income, price sensitivity, performance requirement and many other such equations to consider. So, we are open to all green technology options, including green fuels, and not just from the electrification stable.

Why are you looking at more options?

It’s a very simple logic. In the Indian market, 41-42 lakh cars were sold in 2023-2024. By 2030, it is going to be 70-80 lakh. Today, electric powertrain accounts for 2 or 2.2 per cent and the hybrid about 1.8 per cent. So, near about 95 per cent of the market remains unaddressed. The pace at which we are growing, and also considering that every car that is sold today will remain on the road, for the energy security of the country and to reduce carbon emissions, all clean technologies will be required.

Different green technologies can offer a much better fit in different environments.