India must index its vehicle taxation to emissions and treat hybrid and electric vehicles (EVs) as children of the same parent, said Shekar Viswanathan, vice-chairman and whole-time director, Toyota Kirloskar Motor.
“With different capabilities, it will be tough to make a public policy that will cater to all these diverse products in the marketplace,” Mr. Viswanathan said in an interview. “The government is going to be hard-pressed to come up with a policy that will suit everybody or suit nobody.”
Currently, GST is levied on vehicles based on their length, ground clearance and engine capacity, he said. “What they need to graduate to is taxation should be indexed to pollution or emissions from each vehicle.”
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“That will be the most equitable way of doing it. Unfortunately, if you want the industry to come up with one voice, it is impossible for that to happen. It is not because the industry does not have the interests of India at heart, but the business interest of each player is differently aligned. The government must make a decision instead of expecting industry to talk in one voice,” he said.
Growing market
India’s $30-billion auto market is expected to rank behind only China and the U.S. in sales by 2020. Last year, Tata Motors, Mahindra and Mahindra, Ashok Leyland, Hyundai Motors and Maruti Suzuki announced plans to introduce EVs in India.
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India is reviewing an earlier goal to replace all its passenger vehicles with EVs by 2030. Toyota, however, is pitching for a bigger role for hybrid technology in India.
“EV policy is a shot in the dark,” Mr. Viswanathan said. “There are different industry players who, for reasons best known to them, maybe because they do not have a hybrid technology or because they do not have fuel-efficient vehicles, they have been in pain to decry the hybrid and therefore, promoting electric vehicles by default. The electric vehicle is a very simple concept. It is easy to make. But, it is most consumer-unfriendly.
“The reason why I say this is that there is no charging infrastructure in our country as yet. There is very little customer acceptance even globally.” Toyota Kirloskar Motor unveiled its Camry hybrid in August 2013. The company’s plants on the outskirts of Bengaluru have a combined capacity of 3.10 lakh units. The combined capacity utilisation of the plant last year was 50%.
“The hybrid technology has stood up very well to Indian climatic conditions both cold and extreme heat. Obviously, a vehicle like the Camry cannot fit every pocket. The customer will be very discerning and he will look for vehicles that are less expensive than the Camry. Therefore, we have every plan to bring out other hybrid models such as the Corolla hybrid for instance. That is currently under consideration,” he said.
“We will bring out more hybrids going forward as part of our product portfolio. The emissions are much lower. The fuel efficiency is much higher. There is non-range anxiety. There is no need to stop the car and charge [as] its battery is self-charging.”
Hybrids taxed more
The Centre has given incentives to electric vehicles in the form of 12% GST compared with 43% on hybrid vehicles, he said. That’s preventing the company from accelerating the pace of hybrid production.
“Why the Government of India and Finance Ministry, in particular, [are] not doing the right thing in terms of encouraging more hybrids, I do not know. They must have some reasons. But certainly, those reasons cannot transcend the public interest of reducing pollution.”
On BS VI fuel, he said, “Yes, there was some resistance from the industry to leap from BS IV to BS VI. I believe it is in the public interest that we have BS VI vehicles plying.”