An alliance between Toyota Motor and Suzuki Motor could be a boon to both sides, helping the former gain ground in emerging markets such as India and giving the latter the engineering needed to compete in an increasingly high-tech industry.
Can’t go it alone
The two automakers said Wednesday they were discussing collaboration on environmental, safety and information technology.
Although Toyota President Akio Toyoda told a new conference that the idea of an alliance came together in just two business days after Suzuki Chairman Osamu Suzuki got the ball rolling, there is more to the story. Suzuki’s next partner had been the subject of speculation since August 2015, when the Japanese maker of economy cars ended a capital and business relationship with Germany’s Volkswagen over management conflicts.
Though Chairman Suzuki had said publicly that his company would look to remain independent going forward, another senior executive had acknowledged that collaboration was “necessary” in some fields. Even in India, a successful market for Suzuki, environmental regulations are growing tougher, making investment in technology like hybrid drive systems essential. Rising incomes have also stoked demand for higher-end vehicles in such countries.
Finding a big automaker ally was seen as essential for Suzuki to ensure a presence in self-driving cars. While a Toyota or a Volkswagen has the financial strength to counter the challenge posed by Google and other tech giants in this field — Toyota’s annual research and development budget comes to around 1 trillion yen ($9.59 billion) — Suzuki, which spent just 130 billion yen on R&D in the year ended March 31, hardly stands a chance alone.
Truck-related stocks have massively outperformed the broader markets this year up over 30% while the S&P 500 is up only around 7%. This outperformance has come despite abysmal Class 8 net orders which seem to just get worse each month withAugust 2016 net orders down over 25% compared to last year. In fact, the level of trailing 12-month net orders is the lowest since January 2011 with YoY changes now in negative territory for 18 consecutive months.
Petrol price was today cut by Rs 1.42 a litre and diesel by Rs 2.01 per litre, the third reduction in rates this month on global cues.
Petrol will cost Rs 61.09 a litre in Delhi from midnight tonight as compared to Rs 62.51 a litre currently, said Indian Oil Corp, the nation’s largest fuel retailer.
Similarly, diesel will cost Rs 52.27 per litre as against Rs 54.28 currently.
This is the third reduction in rates this month. Petrol price was last cut by Rs 2.25 a litre on July 16. Diesel rate on that date was reduced by Rs 0.42 a litre. Prior to that petrol price was cut by 89 paise a litre and diesel by 49 paise on July 1.
Prior to the reductions in July, rates had been hiked on four occasions since May 1. Petrol prices in the four hikes had been raised by Rs 4.52 a litre and diesel by Rs 7.72 per litre.
Leading car manufacturer Toyota has moved the National Green Tribunal arguing that the idea to ban diesel vehicles across the country was like a “corporate death penalty” as it impacts the existence of the company.
In its plea, the automobile company said ban on the registration of diesel vehicles manufactured by the applicant company is “unfair and unjust” as it was complying with all the laws and any restriction would severely impact its sales and the livelihood of thousands of people engaged in the automobile sector.
“The applicant company is being penalised for no fault or violation on its part thereby making the order banning registration of diesel cars as unjust and unfair on the company.
“The imposition of ban on registration of diesel vehicles is in the nature of a corporate death penalty as it impacts the very existence of the company. A ban order is an extremely harsh/excessive punishment and ought to be imposed in circumstances where a party commits a serious violation and not when there is no violation,” Toyota said.
The Supreme Court-appointed green panel EPCA has recommended high pollution cess, of up to 25% on the cost of diesel cars above 2,000 cc, multiple times higher than the figure suggested by few automakers.
The Environment Pollution (Prevention and Control) Authority (EPCA) reasoned that imposition of steep cess was imperative to control air pollution in the national capital by making diesel vehicles “cost prohibitive”.
“The argument for a 1% cess therefore goes against the very grain of this,” EPCA said in a note to the apex court.
As per the note, the vehicles have to be divided into three categories — up to 1,200 cc, up to 2,000 cc and 2,000 cc and above — and an Environmental Compensation Cess of 10, 20 and 25% respectively should be imposed on them.
“Diesel car users cannot pay less tax per litre of fuel compared to petrol car and two-wheeler users. This needs to be equalised to control growing use of low tax diesel fuel (meant for farmers and freight) in cars that have cleaner substitutes,” it said.
The Supreme Court of India is considering lifting the ban imposed on the registration of diesel vehicles with engines greater than 2,000cc.
The Supreme Court of India is considering lifting the ban imposed on the registration of diesel vehicles with engines greater than 2,000cc. Vehicles such as the Toyota Innova Crysta, ToyotaFortuner, Tata Safari and multiple cars from German automaker Mercedes-Benz’ portfolio were affected seriously by the ban. The consideration comes as a sign of relief for automakers and buyers alike. A one-time levy of ‘Green Cess’ is being considered instead.
The bench associated with the matter, comprising of Chief Justice T S Thakur, Justices A K Sikri and R Banumathi expressed, “We are inclined to allow registration. We are open to the registration subject to some kind of one-time cess.” Earlier, Mercedes-Benz and Toyota had offered to deposit one per cent of the ex-showroom price of such cars as cess. However, the authorities have not yet reached a concrete decision and the next hearing is scheduled on July 4, 2016.
Meanwhile, the bench also asked senior lawyers representing automobile companies to come up with an appropriate proposal. “Can you (lawyers for auto firms) ask your people to work out details as to what may be the cess to be levied on such vehicles with regard to the showroom price, etc,” the bench said.
With the ban on diesel vehicles with engines above 2,000 cc extended to Kerala, Japanese auto major Toyota is “re-looking” at its Indian operations saying orders are passed “against principle of natural justice”.
Although the company, which operates in India as a joint venture — Toyota Kirloskar Motor — with the Kirloskar group, is not considering shutting shop here, but at the same time it is also not looking at launching new models here.
“We have already started re-looking at our operations. What is hurting us is not so much the ban but the unfairness. Orders are passed without hearing us. It is going against the principles of natural justice. We feel our vehicles are being targetted,” Toyota Kirloskar Motor Vice-Chairman and Whole-time Director Shekar Viswanathan told PTI.
He was reacting to the direction by National Green Tribunal Circuit Bench in Kochi yesterday to Kerala government not to register any diesel vehicle in with engine capacity of 2000 cc and more, except public transport and local authority vehicles.
The green bench had also banned light and heavy diesel vehicles, which are more than 10 years old, in six major cities, including state capital Thiruvananthapuram and commercial capital Kochi.
Toyota is among the automobile manufacturers worst hit the ban imposed by the Supreme Court on registration of diesel cars and SUVs with engines above 2,000 cc in Delhi and National Capital Region last December.
The worst fear of car makers is coming true, as a drive against diesel vehicles spreading outside the national capital region (NCR).
The National Green Tribunal (NGT) on Monday ordered the Kerala government to stop registering diesel vehicles with engine capacity of 2,000cc and above, except public transport and local authority vehicles. The first such ban was imposed in NCR by the Supreme Court in December last year, severely impacting companies such as Toyota and Mercedes Benz.
“The state of Kerala shall not register any diesel vehicle with the capacity of 2,000cc and above, except public transport and local authority vehicle,” the NGT order said.
Executives of Toyota, Mahindra & Mahindra and Mercedes did not comment on the development. An official of industry body the Society of Indian Automobile Manufacturers (Siam) also declined to comment.
Toyota and Mercedes have seen their sales in NCR go down after the ban. Mahindra had introduced a 1,990cc diesel engine for its popular models to bypass the ban.
Speaking on the condition of anonymity, an industry executive said the order was “shocking” and expressed apprehension that the Kerala ban could be a precedent for more states. Public interest litigations against diesel vehicles have already been filed in Gujarat and Maharashtra, among others.
Toyohashi University of Technology and Taisei Corp. unveiled Friday what they say is the world’s first electric vehicle that runs without carrying a battery, using special tires that draw power from an electrified road surface.
In a driving test at the school in Toyohashi, Aichi Prefecture, a small electric vehicle moved quietly on a test course in which two electrified steel paths were laid parallel beneath at the width of the vehicle. Steel wires were embedded into the tires to provide a conduit for the energy to drive the vehicle.
After driving the vehicle on the 30-meter-long course at the speed of about 10 kilometers per hour, Professor Takashi Ohira, who is involved in the vehicle’s development, said, “Acceleration was smooth, and the ride was comfortable.”
Regular electric vehicles are not suitable for long-distance driving due to the relatively small capacity of the batteries loaded on them.
The newly developed EV can only run on electrified roads.
Ohira said that if expressways are fitted with the technology, EVs can run a long distance. “We can then reduce the size of batteries for nonexpressway driving,” he said.