Sunday, 27 October 2013

Hybrids In India. Any Hope?

The concept of hybrid vehicles is not unheard of in India. The Toyota Prius and Honda Civic Hybrid being among the more popular ones, have not seen great numbers owing to their heavy pricing. When the Honda Civic Hybrid was available it was priced higher than the Honda Accord. Prices dropped down to around Rs. 16 lakh and the car saw a surge is enquiries and bookings, this price cut was however short lived.  The Toyota Prius starts upwards of Rs. 30 lakh. Expecting someone to spend Mercedes money for a Japanese commuter car giant is a tall order, but there are a few who do opt for it. The fact is that the Prius does stand out, offers several features and lacks only the luxury brand badge. Perhaps it would fare better if it was badged as a Lexus.

Hybrids have special advantages over regular cars. They consume less fuel, cause less pollution and have the same functionality as a regular car. They also have privileges in certain European nations such as specialized parking and lower taxes on the greener cars, thereby encouraging people to buy them. It will be decades before hybrids are given any breaks over here as our taxation system is silly enough to levy taxes considering engine displacement, but growth is a process not an event. The Mahindra Scorpio comes with a micro hybrid. Essentially it’s just the engine start stop mechanism that puts the engine into sleep mode when the car idles for a preset amount of time and is deactivated when the clutch pedal is depressed.

A fairly common technology in today’s cars but it’s not an actual hybrid. So, the term hybrid has caught on, but will the concept of them being sold in volumes ever become a reality in India? The contributing factors have to be looked into in order to understand what has to be changed.

1. Tax:

There is a need for special provisions to make hybrid cars more desirable. Cars are already heavily taxed in India, so if there were some exemptions made for hybrids, manufacturers would take the initiative automatically. An overall reduction in green house gas emission will result in a better carbon credit standpoint for the nation altogether. The fact that India's automotive industry is still growing, poses the best opportunity to sow the hybrid seed immediately.

2. SKD/CKD/Complete production: 

If hybrid cars were made in India the main issue of import duty would be eradicated. When a manufacturer doesn't see potential in a car, setting up a dedicated production/assembly line is not viable. They could save a lot of money by localizing operations and pass on the savings to potential buyers. This is however, most likely a secondary step after the want for hybrids is created, not so far fetched in a mileage hungry country. If India could be made and export hub for the same it would be a win-win-win situation.

3. Technological Awareness:

For hybrids to work, people need to get familiarized with them. People do not accept what they do not understand. The introduction of more hybrids or hybrid related technology into existing car segments will make people recognize its potential. When they know what hybrid tech has to offer, they will be more willing to buy a green vehicle. Start stop technology has even made its way onto mass two-wheelers like the Hero Splendor i-Smart. The rate at which both the industry and its technology grows equates to widespread implementation. What is on a high end premium car today will make it's way into a regular vehicle tomorrow. So hybrids may not be a fad here like it is in the USA just yet, but the future will be more than promising.

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