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AUTOMOTIVE: HYBRID CARS
Stop Missing The Woods Already!
The Indian Automotive Market has seen a very Internecine Battle for Small Cars, but Unfortunately, Precious little has been done to Encourage Green Technologies in Cars. B&E wonders when The Hybrid Revolution will actually take off.
Issue Date - 09/06/2011
 
“Save the environment. We owe it to our future generations.” Even amidst all the greenwashing that the world gets exposed to nowadays, a statement like this would never fail to grab your attention. But the first world often alleges that in developing economies like India and China, environment often gets substituted by economy. And if they trace the first world path to economic growth, the earth is really headed to its doom.

A recent study by Yale suggested that India’s CO2 emissions grew by almost 8.7% to reach 1.6 billion tons, thereby making India the world’s third largest emitter of CO2 after China and US. While economic development can hardly be compromised, can’t India develop more responsibly than the West did and manage the two seemingly contrarian objectives. While leapfrogging is a buzzword for us in so many different ways, shouldn’t it also figure in our entire approach towards the environment?

The Indian automotive industry is a case in (counter) point, which produced 1.62 million vehicles in April 2011; a growth of around 23% yoy. The small car battle has led to massive competition but unfortunately, in a country where economy (again!) makes more sense than environment, the evolution of green cars hasn’t really taken off. The diversification, albeit visible, is much more towards CNG and LPG powered vehicles. Renewable sources are still being dreamt of as future technologies. More current is a blame game from all corners and a deplorable lack of accountability.

That is why the ‘Bijlees’ are few and far between. We’re neither talking about India’s entertainment baron, nor are we referring to ‘electricity’ per se. Actually, ‘Bijlee’ was an electrically powered three wheeler developed by Mahindra Mahindra (M&M) in strategic collaboration with Jayem Automobiles in 2003. Despite India’s unique position from where it can consolidate itself as a leading promoter of green technology in an era of global power shifts, all that the project could convincingly generate was a subsidy of Rs.8 lakh on electric component excise duty. Unfortunately, the taxes remain intact with high cost of lithum ion batteries and imported technology, which kept it away from the consumer. The green story saw another initiative when Chetan Kumar Maini, the man behind Reva, India’s only electric car to date, came into the limelight in 2007. But electric cars haven’t been fortunate enough to be mass sellers in India.

 
In fact, the world has given preference to PHEV’s (Plug in Hybrid Electric Vehicles) over PEVs (Plug in Electric Vehicles) as per a recent survey conducted by Accenture of around 7008 people across 13 countries. Only 30% said they knew enough about electric vehicles to consider them for their next purchase. Around 71% preferred PHEVs over PEVs.

Honda became the first auto company in India to launch the hybrid in 2008, when they introduced the Honda Civic Hybrid at a price point of Rs.21.5 lakh. However, lukewarm customer response forced Honda to slash down the price of the vehicle to Rs.13.5 lakh in order to clear the imported stock lying in their warehouses. Surprisingly, the stock vanished in the next few hours and clearly depicted the importance, need and relevance of a hybrid car in the country. The company did incur losses, but the initiative was appreciated.

However, the need of a low cost hybrid car in India still needs to be fulfilled. Another major OEM namely Toyota launched its globally renowned green car the touted ‘Prius’ in the country in 2010. But high import duties and taxes inflated the cost to Rs.27 lakh when it could have been ideally made available for around Rs.17-19 lakh. The car has created a lot of curiosity in the market with a high rate of inquiry, but the conversion rates have obviously not been very encouraging. Toyota has sold only 122 such cars since its launch. This is the same car, which is renowned as the global best selling hybrid and has been the no.1 seller in Japan in 2009. High duties, which are about 60% and further go up to around 110% after adding CVD (counterveiling duty), coupled with VAT and other local taxes double the car cost and make it that much more unaffordable. Another initiative came in as the outcome of a recent venture between Bharat Forge and KPIT Cummins which introduced the revolutionary product ‘Revolo’. It’s a kit, which is said to convert cars into hybrids, which still need to gain mass appeal and acceptance.

          

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