Volvo Cars Seeks Incentives To Push Hybrid Vehicles In India

Swedish automaker Volvo Cars wants incentives for hybrid vehicles in India as it looks to expand it's cleaner transport solutions in the country.

“In order for us to do better business in India, the incentive for electrified vehicles would be great,” Paul Welander, senior vice president at Volvo Cars Group told PTI in an interview. Sops for such eco-friendly vehicles can help the company drive in more such products into the country where the government is already pushing for environmental-friendly vehicles, he added. 

The automaker, which sells plug-in hybrid model XC 90 in India, is also seeking lower import duties in the country. Citing examples of China and the U.S., Welander said such duties are much lower in other parts of the globe and India should also be "competitive".

Volvo Cars is also considering engine assembly line at its Bengaluru plant to reduce import duties, Welander said.

In 2018-19 Budget, the government increased customs duty on CKD (completely knocked down) imports of motor vehicles, motor cars, motorcycles from 10 percent to 15 percent. Further, duty on CBU (completely built units) imports of motor vehicles (trucks and buses) was hiked from 20 percent to 25 percent.

Volvo Cars India Managing Director Charles Frump said the company favors taxation on vehicles based on carbon dioxide emissions.

The current taxation system in the country does not provide for any benefit for hybrids and plug-in hybrids, he added.

Under the current system, passenger vehicles attract top GST rate of 28 percent with cess ranging from 1 percent on those less than four meters in length with a petrol engine to 22 percent on big sports utility vehicles which are longer than four meters.

Hybrid vehicles have an overall tax incidence of 43 percent (28 percent peak GST rate plus 15 percent cess).

"Going forward for us the clear path is electric but we are looking to get some understanding of the path for the future. So in our mind, it is clear to take the hybrid route to fully electric vehicles," Frump said.

Globally, Volvo Cars have announced that every vehicle it launches from 2019 will have an electric motor and is aiming to have one million electrified cars on roads by 2025.

The Indian government had last year said it plans to have 100 percent electric vehicles in public transport and 40 percent in personal mobility by 2030. However, earlier this year it changed its stance and decided against formulating an electric vehicle policy saying technology should not be trapped by rules and regulations.

Source- Bloomberg Quint