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Friday, December 31, 2010

ARTICLE: Increase in demand for hybrid cars

The Star Business, Thursday December 30, 2010

Increase in demand for hybrid cars


PETALING JAYA: Honda Malaysia Sdn Bhd and UMW Toyota Motor Sdn Bhd have already recorded combined bookings of nearly 1,500 units for their Honda Insight and Toyota Prius hybrid models respectively in the span of less than three months.

The bookings, if they were to materialise into sales, would represent a significant jump compared with just the 297 total hybrid units sold in the whole of 2009.

The spike in demand for hybrids has been fuelled primarily by the Government's decision under Budget 2011 to grant full excise duty exemptions on hybrid cars below 2,000cc until Dec 31, 2011.

A representative from UMW Toyota said the company had received over 470 bookings for the Prius since the Government's budget announcement on Oct 15, while a spokesperson from Honda Malaysia said it had received 946 bookings for the Insight since the vehicle was launched at the Kuala Lumpur International Motor Show (KLIMS) earlier this month.
At RM98,000, the Honda Insight is the cheapest hybrid car.
“We are expecting bookings to hit 1,000 units by the end of the month,” said the spokesman from Honda, adding that the company had discontinued selling the Honda Civic Hybrid to focus on the Insight instead.
“We have stopped importing the Civic Hybrid but even the stock that we have has already been taken up.”
According to the spokesman, Honda Malaysia will continue to service and provide spare parts for the Civic Hybrid. In total, the company has sold 376 units of the Civic Hybrid, of which 18 units are its first generation (2003) model.

At RM98,000, the Insight is the cheapest hybrid. Honda Malaysia is targeting to sell 4,000 units of the Insight by the end of 2011.

An analyst from a local research house said the spike in demand for hybrid cars like the Insight reflected the public's need for fuel efficient cars at affordable prices.

“The car is not only cheaper but provides good fuel economy as well,” he said.
On its website, Honda Malaysia said delivery of the Insight would begin in February.
Prior to the Government's Budget announcement, the Civic Hybrid and Prius cost RM129,000 and RM175,000 respectively. The latter now costs RM139,900.  A representative from UMW Toyota said the company had sold a total of 250 units of the Prius as of November 2010.

OSK Research auto analyst Ahmad Maghfur Usman said the rise in demand for the Insight could have an impact on sales of other petrol-based vehicles that were within the same price range.

“I think it would affect sales of vehicles like the Toyota Vios and Honda City. People would not mind forking out a bit more money to buy a hybrid.”  The on-the-road with insurance price of the Vios ranges from RM70,783 to RM90,819 while the City starts from RM85,480.

“I think sales of Perodua vehicles would not be affected as these cars are much cheaper,” said Maghfur.
According to reports, national carmaker Proton also has plans to launch a hybrid model of its own, most likely the Exora multi-purpose vehicle, next year.

Analysts were however non-committal on whether the Government may consider re-imposing excise duties on hybrid cars if Proton were to launch its own hybrid vehicle.

One industry observer said re-imposing excise duties on hybrid cars would only “set the local automotive industry back further.”

“The removal of excise duties helps to bring down the price of cars, boost competition and provide long-term benefits to the domestic industry. Furthermore, the more liberalised the local environment, the more it would encourage foreign participation and investment.

“If anything, it (the excise duty exemption) should be extended for a longer period and not on a yearly basis. This would attract foreign players that want to invest in our country for the long term,” he said.

At a press conference at KLIMS earlier this month, Perodua managing director Datuk Aminar Rashid Salleh said the national compact-carmaker had no immediate plans to produce hybrid vehicles of its own.
He said there was still “a lot of life left” for vehicles with internal combustion engines.



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