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Toyota Kirloskar, which does not have a launch this year, expects a flat year ahead. Challenged by the depreciating rupee that impacts many vehicles it sells, Shekar Viswanathan, vice-chairman and wholetime director, tells Ajay Modi the company is looking at increasing prices but is wary of the impact on sales in a slowing market. Edited excerpts:
Given passenger vehicle sales are under pressure, what is the projection at Toyota?
We sold 160,000 vehicles last year, including exports. This year, too, we expect to similar numbers. Our growth is predicated on how fast the Indian market grows. While we hope demand to stay at the same level or improve, we are circumspect. Obviously we want to sell more. But we are cautious. We don’t have any new models coming up this year. We will continue to introduce variants and upgrades in line with changing customer needs.
What level of localisation have you achieved and what is your import dependence?
Each of the models is import dependent. The Etios and Liva are not that dependent, except for diesel engines. There are plans to make diesel engines in India at some stage. In Innova, the import dependence by value is 30 per cent and for Fortuner it is as high as 65-70 per cent. Corolla is half dependent on imports. The more we indigenise, the more money we make. Right now the debate is on if we should increase prices or control cost by procuring locally.
How does the weakening rupee affect you?
The rupee has depreciated from 61 to 64 to a dollar since April. We expect it to depreciate further and we will have to push up prices. We would want an increase even at the current level. But we are discussing if we should do it now or wait for the rupee to depreciate further.
What challenges do you face in localisation?
The decision to buy locally or import is a process. Once we identify a supplier, he has to go through several audits before being approved. The lead time between the identification and supply is difficult to estimate. There is an effort to move towards localisation of the Fortuner and Innova. It works to our advantage.
Is the company working to increase market share?
We are at a higher price end and we continue to sell successfully. People always ask me about market share. I can add market share very easily by dropping prices. But we will make losses. We are not here for market share. We have to sell at the right price to make sustainable profits.
The automobile industry is increasingly being seen as polluting...
The question of pollution needs to be answered in a scientific manner. Take Delhi, there is the Indraprastha power plant right in the heart of the city. Can we ignore the pollution it causes? What the automobile industry can do, it will do. What others need to do, the government has to tell them to do.
You should have a scrapping policy for old vehicles. You can’t have a ten-year-old vehicle running. These are built with outdated technology. Don’t remove them overnight, but at least have a timeframe to do it.
