Business Today

Automobiles: A hybrid year

Honda’s Civic Hybrid may not have been a runaway success, but 2009 promises to be a year of hybrids.

Kushan Mitra | Print Edition: January 11, 2009

Imagine a system where you are stuck at a traffic light and switch off your engine, but keep the air-conditioner on and the stereo playing. And then—when you slip into gear as the lights turn green—the engine starts seamlessly! No sputtering or tension of the engine failing to start.

Pawan Goenka, CEO, Mahindra Automotive
Pawan Goenka
Pawan Goenka, Chief Executive Officer, Mahindra Automotive, worked closely on hybrid vehicles while he was in the US over a decade ago. He feels that the aforementioned “micro-hybrid” technology will become prevalent in many vehicles sold in India by late 2009. And Mahindra has taken a lead—installing it in their Scorpio and Bolero utility vehicles earlier this year. Goenka says if the first batch of vehicles does well, the technology will make it across all vehicles that the group makes.

Full-fledged hybrids have not been that successful in India. Honda’s attempt with the Civic Hybrid was a sales disaster and the company had to slash prices by Rs 7 lakh to get rid of the stock. The problem is that hybrid vehicles in India have to be imported and thus face the punitive taxes that are levied on Completely Built-Up (CBU) vehicle imports.

According to experts in the industry, making an indigenous hybrid would add between Rs 2.5 to 3 lakh to the price of a vehicle. Even with government incentives and lower excise duties, the vehicle would still cost Rs 1 lakh more than a standard version. Says Goenka: “It will be a niche success, but I believe it will still take some time to convince most car users that a hybrid makes economic sense.”

The all-electric Reva has also seen tepid sales in India, even though it has had moderate success in the UK (as the G-Whiz), because despite virtually no duties, it still costs over Rs 3 lakh. The real growth story will unfold, however, in the electric twowheeler market that has seen strong growth in the last couple of years. Soaring price of fuel and the advent of low-cost models has pushed as many as 80 different manufacturers, ranging from relatively small players to auto biggies such as Hero Motors (in a tieup with UK-based Ultra Motors) to invest in this market. With the retail and real estate markets in a slump, expanding dealer chains will be difficult, especially for smaller players.

According to some industry estimates, the e-bike market in India is estimated to grow from 170,000 units in 2007-08 to 240,000 units this year. Ultra Motors expects to sell around 60,000 units this year. Electrotherm India has also jumped in, with scooters under the YoBikes brand name. However, problems persist both in terms of technology and marketing of e-bikes. For starters, the battery technology remains limited to lead acid variants, with mileage of not more than 80 km per charge. More modern variants are expensive, adding to the overall cost of the vehicle, making it unaffordable to consumers. While Pune-based Ace Group has tried to locally manufacture batteries to slash costs, it’s only a small step in cost reduction.

While smaller 100-150 watt bikes don’t require a two-wheeler licence to ride, larger scooters housing a 250-watt engine does require one. The vehicles have varying speed between 20-60 km/hour and some electric two-wheeler makers claim these bikes cost as little as one-tenth of their petrol counterparts (per km) to operate. In addition, at least two state governments—Delhi and West Bengal—have offered subsidies on electric two-wheelers, making them an even more compelling ride.

Efficient sticker
The “Fuel Efficiency” sticker your new car will sport after January 1, 2009 is a small sticker that will highlight the car’s optimum fuel economy in a combined (city and highway) cycle and will be certified by the Bureau of Energy Efficiency.

Alternatives on wheels

Chevy Volt
GM’s Chief Executive went to the US Congress asking for a bailout, driving one of these. This is not a conventional hybrid and uses its engine as a generator for its lithium-ion batteries. Unlike the Prius, you can also “plug” the Volt in. And it has a range of over 1,000 km.

Toyota Prius
The grandfather of all hybrid cars. Toyota was not the first manufacturer to make a hybrid car, nor does it claim to have the best technology. But it’s the first large-scale manufacturer of such vehicles, and has sold over one million hybrid cars across the world.

Tesla Roadster
This all-electric car can accelerate to 100 kms per hour in four seconds. Crafted with the aim of proving that electric cars do not have to be slow pokes. Designed with the help from British race car firm Lotus, the Tesla is an out and out sports car, which you can recharge from a wall socket.

With Rahul Sachitanand

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