Toyota Motor Corp expects hybrid cars to make up 20 percent of its total vehicle sales in India by 2020 from less than 2 percent today, a senior company official told Reuters.
Toyota, which already sells the Camry hybrid in India, plans to introduce hybrid technology in models like the Corolla and Prius sedans and could introduce it for sport-utility vehicles and multi-purpose vehicles, Akito Tachibana, managing director of Toyota's India business said on Wednesday.
The Japanese carmaker also plans to work with its low-cost car-making division, Daihatsu, to develop clean fuel technology vehicles for emerging markets like India, Tachibana said, where affordability is an issue.
The development costs of hybrid vehicles means they are out of reach for a vast majority of India's first-time car buyers, which then makes it difficult for carmakers to achieve the volumes needed to bring down the price.
For instance, Toyota's Camry hybrid is priced starting at 3.3 million rupees ($47,932), about 15 times the price of a petrol variant of one of India's top-selling small cars.
Toyota will work to increase the amount of components it sources from the Indian domestic market to bring down the overall cost of manufacturing hybrids, Tachibana said.
Several Indian cities have high levels of air pollution partly caused by automobiles. Earlier this month, New Delhi shut schools, put construction projects on hold and advised people to stay indoors as part of an "emergency" plan to deal with dangerous levels of air pollution.
Authorities in New Delhi also began revoking licenses for diesel vehicles more than 15 years old which could remove as many as 200,000 cars from the city's roads. Late last year, the country's top court banned the sale of large diesel cars in New Delhi.
"We think that hybrid and plug-in hybrid technology is the best solution in India," Tachibana said, adding that this clean fuel technology is also needed to meet India's stricter emission and fuel efficiency norms starting in 2017.
Toyota's sales in India rose about 3 percent in the first seven months of the current fiscal year ending March 31, 2017, compared with the same period a year ago, according to India's auto industry body the Society of Indian Automobile Manufacturers.
The number of Toyota vehicles sold for that period was 83,633, according to auto industry body data and Toyota's market share was 5 percent.
Total passenger vehicle sales in India rose 11 percent over the same period to 1.77 million.
($1 = 68.8473 Indian rupees)