Toyota Kirloskar Motor to focus on localisation to derisk business


New Delhi: Toyota Kirloskar Motor (TKM) is looking at enhancing localisation of its products as well as technologies as it aims to de-risk its business from foreign exchange fluctuations as well supply chain challenges, according to a senior company official.

The company, which is a joint venture between Japanese auto major Toyota and the Kirloskar Group, is increasing local content in car manufacturing as well as planning to produce hybrid systems in the country.

“We are looking at localisation not only because of Made in India initiative. Backward integration also insulates from exchange rate fluctuations and makes supply chain shorter,” TKM Senior Vice President (Sales and Service) Naveen Soni said.

“It is an ongoing process. The engine for Innova Crysta is now manufactured locally. Almost 85 per cent of the components used in the engine are locally manufactured. We have gradually increased localisation in gearboxes and other critical components,” Soni said.

The auto major also plans to locally manufacture hybrid systems in the country. TKM currently imports such systems. A hybrid vehicle has more than one source of power. Usually, it combines a conventional combustion engine with an electric motor to run the vehicle.
As part of Toyota’s global collaboration with Suzuki Motor Corp, the systems could also be supplied to Maruti Suzuki India.

“We do not discuss future product and investment plans,” Soni said.

In March 2018, Toyota Motor Corp and Suzuki Motor Corp (SMC) had concluded a basic agreement for supplying hybrid and other vehicles to each other in the Indian market. Soni said that hybrid technology can accrue various benefits to the automaker.

“We believe in future all technologies will have space depending on size and class of the vehicle. Toyota firmly believes that “all technologies will co-exist in the future. It won’t be like one technology will take over the another.”

Soni noted that even with increase in diesel fuel prices as well as overall rise in prices of BS-VI diesel cars, demand for its models like Innova and Fortuner remained strong.