Subsidies provided to hybrid vehicles to promote eco-friendly automobiles are insufficient, Japanese car major Honda said today, calling for a clear distinction between fully hybrid and mild hybrid technologies for equitable distribution of resources.
The company, which is set to launch Accord hybrid in the country later this month, said the subsidies offered to hybrid vehicles currently under the FAME scheme in the current form are not sufficient.
"There are different levels of hybrid technologies some are mild systems while some full hybrid systems. I think it is necessary to differentiate, otherwise the cost difference is there," Honda Cars India President & Ceo Yoichiro Ueno told PTI.
In a mild hybrid the cost may not be that high so if the government can consider difference of technology levels it will be appreciated, he added.
"Government can distribute the resources more efficiently," Ueno said.
Currently, carmakers like Maruti Suzuki and Mahindra sell some of their models with mild hybrid technology.
These models are affordable as compared to a vehicle with fully hybrid technology.
But currently both mild and fully hybrid models get similar kind of benefits under the FAME scheme, which was launched last year to promote eco-friendly vehicles.
Besides, imported CBU models do not come under the ambit of the scheme, making them all the more expensive to own.
FAME India scheme offers incentives on electric and hybrid vehicles of up to Rs 29,000 for bikes and Rs 1.38 lakh for cars.
FAME India - Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India - is a part of the National Electric Mobility Mission Plan.
When asked if the FAME scheme is adequate to push hybrid vehicles or the government needs to do more to promote hybrid vehicles in the country, Ueno said: "It's not enough to cover the cost difference of the hybrid vehicles."
He added that initial government support is necessary for hybrid vehicles to succeed in a country.
"If I see other countries, hybrid technologies initially needed some government support. In most of the countries government initially supported with some reduced taxes or incentive to the customer," he said.
Government is also concerned about environmental issues and can give some support to hybrid vehicles and it will be very helpful to accelerate penetration of such vehicles in the country, he added.
Ueno said the launch of Accord Hybrid later this month would help the company gauge customer response for such products.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)