Mumbai: Going green is becoming fashionable among car makers.
Long been held responsible for releasing ozone-depleting carbon dioxide into the atmosphere, vehicle companies are going all-out to shed their earth-killer image. And this isn’t just happening in Western countries, where lesser polluting vehicles called hybrids are already making inroads into the market, but in India too.
Long way to go:A Honda Civic Hybrid car at the Auto Expo in New Delhi. While the efforts of car makers to go green are commendable, analysts say the market for such hybrid vehicles in India is still some years away.
Almost every vehicle maker today has some form of a green technology initiative, be it developing hybrids and fuel cells, focusing on biofuels such as ethanol, or producing vehicles that run on alternative fuels such as compressed natural gas (CNG) or liquefied petroleum gas (LPG). Indian vehicle makers are also getting on to the bandwagon.
Both Tata Motors Ltd and Mahindra and Mahindra Ltd (M&M) have caught on to these international trends. While Tata Motors is working on hydrogen-fuelled buses and on an engine powered by air, M&M is putting its energy on electric hybrids and hydrogen-fuelled vehicles.
Tata Motors has tied up with the Indian Space Research Organisation (Isro) to work on hydrogen technology to run buses. Isro will provide the expertise for handling liquid hydrogen, which it uses with liquid oxygen to power engines used to launch heavy rockets.
“Energy security and international pressure to cut emissions will be important factors since India cannot be isolated (from these),” said Abdul Majeed, who consults on automobiles for audit and consulting firm PricewaterhouseCoopers.
India is the world’s fifth largest oil importer, with almost 80% of its energy needs being met through imports. With oil prices threatening to breach and stay above the $100 a barrel mark (about Rs4,000), the country will need to find new means of cutting down on its oil imports.
M&M showcased two hybrid vehicles at this year’s Auto Expo. The company has also completed the first phase of a pre-feasibility study on hydrogen-based transportation with Royal Dutch Shell Plc. in June. The second phase of the same study is now under way. Shell has been pursuing business opportunities in the area of hydrogen and fuel cells through a dedicated business group named Shell Hydrogen, which it set up in 1999.
“Phase 2 is going to focus on more specific issues such as the number of vehicles we want to make, and what is our road map to take the hydrogen initiative forward,” said Arun Jaura, senior vice-president, global product development, M&M.
But while these efforts are commendable, analysts say the market for such hybrid vehicles in India is still some years away. The immediate and practical route will be in the form of vehicles running on alternative fuels such as CNG, LPG or ethanol-blends, they point out.
The current generation of petrol-electric hybrid vehicles such as Toyota Motor Corp.’s Prius uses a combination of battery power and a combustion engine to drive the vehicle. Globally, Toyota’s Prius is among the most famous of such vehicles with worldwide sales of 900,000 units since its launch in 1997. Other vehicle makers such as Honda Motor Ltd, General Motors Corp. and Ford Motor Co., too, are now developing their own hybrid electric vehicles.
A market for hybrid vehicles, especially passenger cars, in India will take off in “at least the next 8-10 years,” according to Kapil Arora, partner, risk advisory services at audit and consulting firm Ernst and Young (E&Y), who is in charge of the automobile business. A market for electric two- and three-wheelers though will develop much sooner in around three-five years, he added.
As of now, only Bangalore-based Reva Electric Car Co. Ltd has an electric car, the Reva, a two-door, toy-like model, on the road. Domestic sales of the Reva have been little to write home about, but it has quickly caught the fancy of customers in London, where more than 600 ply on the roads according to Reva’s website.
In two-wheelers, companies such as Ultra Motor India, a joint venture between the Hero Group and UK’s Ultratech, and Electrotherm India Ltd have made a small start. With no organized body to represent these manufacturers, industry players guess that there are between 75 and 80 companies making electric bikes in India. Together, they are estimated to sell about 100,000 bikes annually.
On the other hand, vehicles running on CNG and LPG are gaining ground in India. Maruti Suzuki India Ltd’s WagonR Duo, the car’s LPG version, and other CNG variants from Tata Motors, Hyundai Motor India Ltd, Ford India Pvt. Ltd and General Motors India Ltd are winning over customers, though not in hordes because of some inherent problems.
CNG- and LPG-run vehicles have had limited success, said E&Y’s Arora, because the infrastructure in the form of fuel stations and the availability of fuel is not adequate to meet demand.
M&M’s Jaura said all other factors, including government policy, fuel availability and traffic systems, will have to be improved to make hybrid vehicles a success in India.
Naturally, these vehicles will come at a premium price.
M&M is not putting all its eggs in one basket though. The company also runs parallel R&D programmes on biodiesels, CNG and LPG. “Going forward, we are going to have the complete range of green vehicles,” said Jaura.