Toyota’s Vikram Gulati calls for tax policy changes.
By Sweta Roy | October 19, 2023
Toyota’s flex-fuel prototype vehicle has received a lukewarm response, said Toyota dealers and associations across multiple stores after they received fewer inquires. The flex-fuel vehicle (FFV) prototype was launched in August and is the world’s first to combine flex-fuel technology with electric mobility.
Only 25 people inquired about the flex-fuel prototype in a month following the launch, with only 10 of them expressing a genuine interest, said Arbaz Pasha, Nandi Toyota, Bengaluru. Similar trends were found across stores in Delhi, Noida, Gurugram and Bengaluru.
Hybrid prototype gets around 1800 inquiries in a month across our Galaxy showrooms in Delhi even before launch but for FFVs, we have received only 24 queries in a month, said Manoj Guleria, guest experience manager at Delhi-based Galaxy Toyota.
India requires a combination of measures including tax rebates and awareness campaigns to boost demand, said Vikram Gulati, country head & executive vice president, Toyota Kirloskar Motors.
Countries like Brazil and the US that have adopted flex-fuel cars have offered tax rebates and subsidies to make ethanol accessible and cheaper than gasoline.
In India, the current taxation policy on Flex Fuel Vehicles (FFVs) does not offer any special rebate to the customers for opting a biofuel-run vehicle. FFVs, like any other petrol or diesel vehicles, are currently subjected to a 28% Goods and Service Tax (GST). For an electric vehicle, a consumer pays a lower GST rate at 5%.
The consumer will end up paying more tax for a much cleaner vehicle due high manufacturing cost without tax rebates, Gulati explained. Having a lower road tax will make flex-fuel vehicles more attractive to the consumers, he said.
Several car manufacturers, including Maruti Suzuki, and Mahindra & Mahindra have announced plans to transition to ethanol-blended fuel.
Experts, however, believe that the government needs to build the infrastructure to promote ethanol-based vehicles.
Demand can only be created after the vehicle is launched and there’s a need for infrastructure and bio fuel to power these vehicles, said Saharsh Damani, chief executive officer, Federation of Automobile Dealers Association (FADA).