Toyota Kirloskar India to begin building engines and transmissions for the Etios sedan and Liva hatchback: Price drop in the offing?
Toyota Kirloskar Motors is all set to begin producing engines and transmissions for the Etios sedan and Liva hatchback, two of Toyota’s least priced products for the Indian car market. The Japanese car maker has also begun exporting the Etios and Liva. Both the cars comes with both petrol and diesel engine option, with Toyota importing both the engines as well as transmissions. This has meant that Toyota ends up paying a hefty import duty on each engine and transmission being imported to be fit in the Etios sedan or the Liva hatchback, leading to the final cost of these cars increasing.
So, by building engines and transmissions in India, Toyota could save a bunch of money on each Etios sedan and Liva hatchback sold in the country and abroad. So, a price drop to the tune of a few ten thousand rupees on both the Etios and Liva could be expected if in case Toyota decides to pass on the cost saving benefit to the car buyer, something that it is likely to do so given the growing competition in both the hatchback as well as the entry level C-segment sedan space. Both the Etios and Liva could do with an attractive price drop, as the car market is in a general slowdown.
Toyota’s engine plant, which will be set up at Bidadi, off Bangalore will be set up at an investment of about INR 500 crores. The engine manufacturing unit will produce 100,000 engines and 240,000 transmissions annually while also employing more Indians to work at the plant. It remains unclear whether both petrol and diesel engines will be manufactured at this plant. If the diesel engine is also produced at the Toyota plant, then the Corolla Altis could also get the made-in-India 1.4 Liter D-4D common rail turbo diesel engine.
Currently, the 1.4 D-4D engine powers three Toyota models, the Corolla Altis, the Etios and the Liva. While the engine is fitted with a variable geometry turbocharger in the Corolla, the engine comes with a fixed geometry turbo in the Etios and the Liva. Another positive emerging from the engine manufacturing operation of Toyota in India, is that it will lead to a higher amount of localization. This higher localization is expected to bring down spare parts costs, which is something that the Toyota car buyers stand to gain over the longer term.