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With incentives and new models, Indians plugging into hybrid cars

Rashmi Pratap Mumbai | Updated on January 13, 2018 Published on February 22, 2017

Down the green lane: Honda’s Accord Hybrid

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Lower costs, charging facilities are critical to expanding the market further

Indian customers are warming up to hybrid cars, albeit slowly. Incentives by the government and increased focus on new models by auto manufacturers have given a fillip to sales of hybrid vehicles, which have a traditional petrol or diesel combustion engine plus an electric motor that supports or substitutes the main engine.

Hybrid models of Maruti’s mid-size sedan Ciaz and multi-utility vehicle Ertiga, offering mild-hybrid technology, have crossed cumulative sales of 1 lakh units in February while Honda’s hybrid Accord has been fully pre-booked ahead of imports, the second time this fiscal.

Over 6 lakh Mahindra & Mahindra vehicles with micro hybrid technology are on the roads now.

“We are seeing an increase in demand with growing awareness about hybrid vehicles. Indian customers are showing a preference towards greener solutions,” A Sriniwas, Senior Vice-President - Product Development, Automotive Division, M&M, told BusinessLine. In July 2016, M&M launched the Scorpio Intelli hybrid, which reduces fuel consumption by up to 7 per cent.

Currently, Indian automakers predominantly offer mild hybrid cars. These are mostly internal combustion engines equipped with an electric motor or battery in a parallel configuration.

Micro hybrid tech

The battery assists the engine with electric power during acceleration and automatically switching the engine off while the vehicle is stationary. Micro hybrid technology switches off the vehicle’s engine after it has come to a complete halt, trimming both fuel use and emission.

M&M has sold over 30,000 Intelli Hybrids since July last year. “The Scorpio hybrid system architecture is well accepted by the customers,” Sriniwas said.

RS Kalsi, Executive Director, Marketing and Sales, Maruti Suzuki, said the hybrid models of Ciaz and Ertiga are high on fuel efficiency, and offer lower running costs and carbon dioxide emission.

“This makes them popular among customers. The response we have received for them encourages us to continue investment in new technologies that support the environment and benefit the customer,” he observed.

Abdul Majeed, Partner at PwC India, said the perception of people about hybrid vehicles is changing and they are seeing environment benefits. “Moreover, the ban on diesel vehicles last year has led to people considering buying hybrid vehicles,” he said.

FAME scheme

The Centre’s FAME (Faster Adoption and Manufacturing of Hybrid and Electric vehicles) scheme is offering incentives on electric and hybrid vehicles for four-wheelers between ₹13,000 and ₹1.38 lakh. “This has also given a push to sales of hybrid vehicles,” Majeed added.

Honda India is currently importing its Accord Hybrid via the completely built unit (CBU) route. “It has been very well accepted by buyers. But it is an expensive product due to high customs duty,” said Jnaneswar Sen , Senior Vice-President of Sales and Marketing at Honda Cars.

Lack of scale

Pricing is the significant hurdle in the faster adoption of hybrids. Due to high costs of developing green technology and lack of scale, hybrid cars can be more expensive than their standard counterparts by 20-50 per cent.

“One of the significant contributors of the cost is the battery. While there has been progress on this front in the last decade, there is a need to encourage innovation both on design and manufacturing to drive down costs further,” Sriniwas said.

Additionally, most of the hybrid components are still imported in the absence of local development.

“It is also important to create adequate infrastructure for plug-in hybrids and electric vehicles, as charging is crucial for faster adoption,” Majeed added.

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Published on February 22, 2017
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