Toyota hopes to drive Prius in India with 'green car' subsidy

Toyota Kirloskar Motors (TKM), the Indian subsidiary of the Japanese car major that is currently facing some roadblocks with its hybrid car Prius in the global markets, is hopeful of working out a subsidy for the car as it enters the Indian market as a completely built unit (CBU) in March this year.
Currently, CBUs attract a duty of over 100 per cent in India, and the Prius is expected to cost between Rs 26.55 lakh and Rs 27.86 lakh here thanks to the high customs duty. The company has been in talks with the Centre since the last six months, and is eagerly waiting for this year’s Union Budget to have some good news for them.

Hiroshi Nakagawa, managing director, TKM said, “We are expecting the government to offer some incentives for buying an environment-friendly vehicle,” adding that the quantum of incentive is not specified. Toyota India feels that this is not just any other imported luxury vehicle and that the government could allow an incentive in the form of a subsidy to encourage the sales of ‘green’ cars.

TKM plans to sell around 200 units of the car this year. Prius is the world’s first mass-produced and largest-selling hybrid vehicle, having sold nearly 1.5 million units so far. Toyota has already received orders for 54 units in India.

The global trouble with Prius follows close on the heels of Toyota’s recall of 8 million cars (including Corolla and Camry) around the world because of sticky accelerator pedals. The Prius was recalled for brake software flaws. When asked if this could impact the launch of the car here, Nakagawa said that TKM would go ahead with its India launch plans as usual.

TKM had initially approached Toyota Motor Corporation for subsidies, but was advised to talk to the government of India.

As a part of the launch campaign, TKM is organising road shows across the country, and also showcasing the vehicle at auto shows to enable the potential consumer to have a touch and feel of the Prius.

Meanwhile, the company is all set to go ahead with the production of its new car Etios that will be available in a hatchback and a sedan version. Production is scheduled to start from December this year at its Bidadi plant and the car will hit the roads during the first quarter of 2011 calendar year. The company had sold 55,497 units in the country in 2009 and targets to sell 70,000 units this year. In 2011, however, TKM plans to sell 70,000 units of the Etios, taking its net sales number to above 1.4 lakh.