One of the world’s leading automakers and the 13th-largest business by revenue in the world, Toyota Motor Corp (TYO:7203) has revealed their plans of selling more hybrid cars in India. Toyota says they want 20 percent of their hybrid vehicles to be sold in the country by 2020. That is a very ambitious plan as the business currently sells just 2 percent of their hybrid cars in India.
Hybrid Vehicles Are Still New in India
In fact, hybrid vehicles are a new market segment in the country. There are few carmakers that are offering these vehicles in India at this time. Very few such automobiles are currently sold, but the numbers are growing. However, the overall growth of the car segment in India is very positive, which is why Toyota wants to be a big player in the country.
Presently, the Camry hybrid is sold in the country. However, models such as the Prius and Corolla sedans with the technology are going to be introduced soon for multipurpose vehicles and sport-utility vehicles. This was revealed by Akito Tachibana, who is the managing director of the business in India.
The plan may not be easy, though, as the Toyota (TYO:7203) Prius hasn’t been a great success in the country, one reason for which is its pollution problem. Its hybrid version to be launched in early 2017 could be different, though. Another reason for the failure of the Prius was its price. India is often an extremely price-sensitive market.
Hybrid vehicles take a lot more money to develop and cost more naturally. They are out of reach for many of India’s first-time car buyers. Carmakers are unable to get the volumes that allow them to bring the price down. The Camry hybrid, for instance, costs 3.3 million rupees or $47,932, which is 15 times costlier than the petrol variant.
Air pollution caused by automobiles is a serious issue in the country. New Delhi had to shut schools earlier this year, and people were told to stay indoors. Licenses of diesel automobiles that are older than 15 years are being revoked in many Indian cities. So if priced right, Toyota’s new technology hybrid vehicles could have a big future here.
Toyota’s Plans for India
Tachibana says that the carmaker from Japan is also planning to work with Daihatsu, their low-cost car-making division, for developing vehicles with clean fuel technologies not just for India, but other emerging markets as well. With this, the company will be able to take on the two challenges in the country, price, and clean technology.