Hybrid cars may cost less as Govt mulls import duty cuts

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For those looking to buy environment-friendly cars but have been deterred by the high prices, there is some good news.

The Government is looking to reduce the import duty on hybrid vehicles so that global automakers introduce in India vehicles running on alternative fuels and powertrain technologies.

According to Vilasrao Deshmukh, Minister for Heavy Industries and Public Enterprises, who was speaking on the sidelines of SIAM's Environment Friendly Vehicles conference on Monday, a proposal would be presented to the Finance Ministry within a few days.

"My Department will recommend to the Finance Ministry on how it should be done and by how much. This will be done after the outcome of the conference. If you want to have eco-friendly vehicles then definitely some concessions have to be offered," he said.

Till now, the main hurdle for the introduction of such products has been the high import duty, of over 100%, that all completely built unit (CBU) attract in India. The industry, however, has been lobbying for reduction of duties for environment-friendly vehicles.

Globally, all major automakers have hybrid vehicles in their portfolio. Toyota's Prius, which runs mainly on an electric engine supplemented by a petrol engine, is one such car that is expected to be launched soon. Other hybrids sold overseas include Honda's Insight, the Civic Hybrid; Ford's Fusion Hybrid, and the Chevrolet Volt.

Asked if the excise benefits offered in the stimulus packages would continue, Deshmukh said that it would be considered after viewing the current situation.

Continuing sops

"Things have changed - there is very good demand, especially for four- and two-wheelers. Whether it (the concessions) should be continued further or stopped at this level, we will only consider after taking into account the current picture," he said.

Deshmukh further said that according to the Automotive Mission Plan (AMP), the Indian auto industry should be worth USD 145 billion by 2016, which would require an investment of USD 35-40 billion.

Taken from Business Line