Maruti and Toyota Leverage UP Govt's Hybrid Car Tax Waivers to Boost Sales: Report

In a bold move to capitalize on recent tax incentives, Japanese automakers Maruti Suzuki and Toyota have intensified their efforts to promote hybrid vehicles in Uttar Pradesh, according to Reuters 

Following a significant lobbying victory, both companies are now setting ambitious sales targets for their dealers, hoping to drive up hybrid car sales and take full advantage of the state's tax waiver scheme.

The tax waivers introduced by the Uttar Pradesh government offer substantial savings for buyers of hybrid cars. For instance, the luxury Toyota Vellfire model now comes with a tax saving of approximately Rs 1,309,400, while the popular Camry sedan benefits from a Rs 431,600 reduction. This financial incentive has already begun to shift consumer interest towards hybrids, as the companies report a significant rise in showroom inquiries.

Maruti Suzuki and Toyota have responded with aggressive marketing campaigns, utilizing both digital and traditional channels to reach potential customers. 

"Save big .... Order now and get your hybrid vehicle delivered right at your doorstep," reads one of the Instagram ads from Sunny Toyota, a dealership in Uttar Pradesh's capital, Lucknow, according to Reuters. 

The strategic focus on hybrids marks a divergence within India's auto industry. While Maruti Suzuki and Toyota celebrate their success, rivals like Tata Motors, Mahindra & Mahindra, and Hyundai express concerns that the tax waivers for hybrids will negatively impact the sales of pure electric vehicles (EVs).

These companies had lobbied to reverse the July decision, fearing that other states might adopt similar measures, but their efforts were unsuccessful.

At the forefront of this push, Toyota has long favored hybrids over EVs, citing concerns over charging infrastructure and the high cost of electric vehicles.

This strategy seems to be paying off, especially in markets like Uttar Pradesh, where hybrids offer a more accessible alternative to the still-developing EV sector. Reuters quoted Rahul Bharti, Executive Director for Corporate Affairs at Maruti, as saying, "Showroom enquiries have nearly doubled since the benefits have been effected for hybrids."

Dealerships across Uttar Pradesh are now under pressure to meet stringent sales targets. "We have been asked to sell a minimum of 250 cars in a month. There is a lot of pressure. We are trying to shift all sales to hybrids," a Maruti salesperson told Reuters. 

This push has resulted in notable increases in hybrid car sales. Praveen Saxena, a sales manager at a Toyota showroom in Kanpur, revealed that his dealership's hybrid car sales had surged by 50% after the tax waivers were announced. Saxena emphasized the urgency of the situation, advising customers to purchase quickly, as "No one knows how long the scheme would run," Reuters quoted him as saying.

The impact of these efforts is already visible on the ground. K.S. Dhatwalia, a former Indian government official, opted for a Toyota Hyryder hybrid, citing both environmental benefits and the attractive tax savings. "Hybrids are less polluting and there was an additional tax saving too," Reuters quoted him as saying, reflecting a growing sentiment among consumers.