The largest car maker in the world Toyota has asked the Union Government to drop the segmentation on sub-4 metre category cars in the run-up to the introduction of Euro 6 fuel and the advent of GST.
A top official of the the Indian arm of Toyota Motor Company told BusinessLine that all the car makers are gearing up to introduce newer engines which have to be compatible with Euro 6 fuel by 2020. To comply with this norm, car makers will have to build vehicles which are longer than 4 metres to retain the same safety features which are available in the bigger car segments.
“Reducing the car length to less than 4 metres will come at the expense of consumer comfort, safety and affordability,” said Toyota Kirloskar Motor’s Vice-Chairman Shekar Viswanathan.
Given that all car makers have to comply with the 2020 deadline for adhering to Euro 6 fuel norms, Vishwanathan said that it will necessitate the introduction of the diesel particulate filter or selective catalytic reducer within the engine compartment. This will mean that to have ergonomically designed cars, they need to have a length of more than 4 metres retaining the same safety features as is available in the bigger car segments.
Viswanathan also pointed put that it will be difficult for the car industry to start introducing newer models in the run-up to the introduction of Euro 6 fuel. This will work to the disadvantage of the consumer who buys new models in 2018 and 2019, which will then have to use Euro 6 fuel in 2020, while it will carry engines that are designed for Euro 4 fuel.
“While this may not damage the engine how many would like to invest in a Euro 4 vehicle when they realise Euro 6 vehicles will be available in 2020? Equally how many car makers would like to introduce newer models carrying Euro 4 engines when in 2020 it will be mandatory to have Euro 6 engines.”
A top official with TKM said no plans had been firmed up for the Indian market for a new passenger car.
TKM's Viswanathan said Toyota and Daihatsu had established an internal company to focus on the needs of the emerging market targeting the compact car segment which is Daihatsu’s forte.
Therefore, it follows there will emerge products that cater to the A and B segment of the Indian car market which itself accounts for about 70 per cent of the domestic market.
Within this, the B segment has been gaining in prominence as the purchasing power of the Indian public has also gone up.
If this becomes a trend, then over the next ten years, the B and the C segments will gain market share compared to the A segment.
Going forward, over the next 10 to 15 years, segmentation of the Indian car market could go along with technology rather than size, features and price which broadly determine segmentation within the domestic car space.