Toyota and Maruti Suzuki Drive Hybrid Sales Surge in Uttar Pradesh with Tax Waiver Incentives

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Toyota and Maruti Suzuki, two of Japan’s largest automakers, are launching aggressive marketing campaigns in Uttar Pradesh, India’s most populous state, to capitalize on tax waivers for hybrid vehicles. From Instagram ads to telesales, these automakers are pulling out all the stops to entice customers with significant savings, while rivals in the electric vehicle (EV) sector, like Tata Motors, Mahindra & Mahindra, and Hyundai, express concerns about the impact on their own sales.

The state’s decision to offer tax waivers on hybrid cars has caused a divide in India’s auto industry. Competitors argue that these waivers, which reduce the price of hybrid vehicles, could harm the growing market for pure electric vehicles. For instance, EV manufacturers fear that potential buyers of electric cars may now turn to hybrids, stalling momentum in a sector already grappling with challenges such as limited charging infrastructure and high prices.

At the Sunny Toyota dealership in Lucknow, the capital of Uttar Pradesh, sales teams are actively reaching out to potential buyers, focusing on those who visited the showroom in the last six months. They are promoting the cost savings made possible by the tax waivers, with messages highlighting the $15,800 savings on Toyota’s luxury Vellfire model and a $5,200 discount on the Camry sedan. These aggressive marketing strategies are also being seen on social media, with ads like, “Save big… Order now and get your hybrid vehicle delivered right to your doorstep,” targeting interested buyers via platforms such as Instagram.

This sales push comes after Toyota successfully lobbied for the state government to introduce these tax waivers, offering around 10% in savings for hybrid vehicle buyers. Uttar Pradesh, which accounts for about 10% of all car sales in India, has become a key battleground for automakers. While the federal government taxes electric vehicles at just 5%, hybrids face a much steeper tax rate of 43%, only slightly lower than the 48% tax on gasoline cars. State taxes, which can add significantly to the price, are determined at the local government level, making Uttar Pradesh’s tax relief particularly appealing for hybrid buyers.

Globally, Toyota has favored hybrid technology, combining gasoline engines with batteries, over fully electric vehicles. This strategy is proving advantageous, particularly as concerns about the lack of charging infrastructure and the high cost of EVs slow the adoption of electric cars. In contrast, hybrid sales are gaining momentum, appealing to buyers who want both environmental benefits and the convenience of gasoline-powered engines.

Sales teams for both Toyota and Maruti Suzuki, which also supports the tax waivers, report a noticeable increase in hybrid vehicle inquiries. “We’ve been tasked with selling at least 250 hybrid cars each month. There’s a lot of pressure to shift sales entirely to hybrids,” shared a Maruti salesperson, reflecting the urgency to capitalize on the tax savings.

Rahul Bharti, Executive Director for Corporate Affairs at Maruti Suzuki, noted that showroom inquiries for hybrid models have “nearly doubled since the tax benefits were introduced.” This increase in interest is supported by a strong online presence, with dealers utilizing WhatsApp and social media ads boasting taglines such as “Enjoy the nil road tax offer” and “Say Goodbye to Diesel.”

At the Sunny Toyota dealership, staff are being encouraged to focus on customers previously interested in gasoline or diesel vehicles, as they may now be swayed toward hybrid cars thanks to the tax incentives. “We’re advising customers to act quickly because no one knows how long the scheme will last,” said Praveen Saxena, a sales manager at Toyota’s Kanpur showroom. Since the tax waivers were introduced, Saxena noted that hybrid sales have increased by 50%.

One such customer is K.S. Dhatwalia, a former Indian government official, who recently purchased a Toyota Hyryder hybrid. He explained his decision, saying, “Hybrids are less polluting, and the additional tax savings made it an easy choice.”

While Toyota and Maruti Suzuki are thriving in this hybrid-focused environment, some industry experts wonder how long the tax incentives will remain in place. With rivals lobbying for more support for electric vehicles, the situation remains fluid. However, for now, these automakers are seeing success in one of India’s largest and most important states, reaping the benefits of their hybrid strategy.

This tax waiver initiative could shape the future of India’s automotive landscape, especially in states like Uttar Pradesh, where consumer preferences are highly price-sensitive. As EV manufacturers continue to push for greater adoption, the balance between hybrids and electric vehicles remains a focal point in the country’s evolving transportation market.