Swati Khandelwal, CNBC-TV18

Honda Siel Cars has launched its Civic Hybrid that will cost Rs 21.5 lakh in India. Honda may consider launching smaller hybrid cars in India.

As oil continues to boil, the demand for hybrids is bound to  pick up. So Honda has brought  in India's first hybrid vehicle - the Civic Hybrid. A CBU, the new Civic will attract a 104% import duty, but will give you as much as 20 km per litre.

This one is 50% more fuel efficent than a petrol 1.8 litre Civic. It sports a 1.3 litre ivetch engine and an integrated motor assist. The consumption of fuel is computer controlled..Battery gets charged automatically when the car is in  motion, so no hassle of charging the battery externally.

To start with, Honda is bringing in 400 hybrids, but if demand is strong, it may even manufacture in India. Honda will even build a hybrid of its small car - Jazz. It plans to reduce its production costs with a new electronic control unit and a thinner, more compact battery. A thinner motor has also been developed.

Masahiro Takedagawa, President of the Honda Siel Car India, said, "We may manufacture the hybrid Civic if the demand comes and may introduce this technology on smaller cars."

Toyota too plans to launch its Hybrid car - Prius in India. But manufacturers are looking for sweeteners from the government.

Countries across the world are offering subsidies to promote the use of hybrid cars. In fact, the US and Japan offer subsidies of up to USd 2,000 per hybrid.