A hybrid vehicle burns much less fuel, and hence pollutes much less.

Green is not just the color of envy. It has also become the favorite color for Indian automakers. Heavyweights like Mahindra & Mahindra (M&M), Bajaj Auto and Tata Motors seem to be in a tearing hurry to rustle up a green technology initiative like hybrid vehicles which banks on alternative fuel options.
The primary reasons: a growing market for such vehicles on the back of growing environment consciousness and the confidence of Indian companies to deliver such vehicles at much lower prices compared to those offered by their western counterparts. But more importantly, these vehicles may have a great potential even in the domestic market. Auto analysts indicate that the market for two-wheeler hybrids in the country will take off faster than 4-wheeler passenger vehicles, Economictimes.indiatimes.com reported.
As gasoline becomes more expensive and the search for both fuel efficiency and an alternative power train continues, the challenge for the auto industry will be to marry that demand with affordability.
“Indian consumers want the cost impact to be minimal. So initial launch of the micro-hybrids will not push up the price of the vehicle,“ says Arun Jaura, senior VP, global product development, M&M .
M&M has been the first Indian firm off the blocks. It announced a hybrid variant of their sports utility vehicle (SUV) Scorpio at the recently concluded Auto Expo.
“Changing environmental effects and thrust on cleaner vehicles are some of the reasons of this green revolution. We will start with the SUVs, then go onto pick-up trucks and other vehicle platforms,“ says Jaura.
M&M indicates that it has the first mover advantage as it will launch a diesel electric hybrid SUV which will give the maximum torque, lower emission levels and enhanced driveability. M&M plans to take its hybrid vehicles global (Europe and the US) in the next 18-24 months.
Jaura believes that even India is ready for hybrids. A recent survey done by M&M on the driving patterns in India showed that every 400 meters there is a traffic signal. A driver stops at a signal for a minimum of 30-60 seconds, burning fuel. A hybrid vehicle burns much less fuel, and hence pollutes much less.
M&M’s tie up with Royal Dutch Shell will help it develop electric hybrids and hydrogen-powered vehicles too.
Initially, M&M also plans to launch a micro-hybrid version of the Bolero and then it will have a complete range of “green“ vehicles. These are early days, and hybrid technology will take time to mature in the Indian market. The government will have to put together regulations (like being exempt from road tax) and improve the infrastructure to make it a success.
Tata Motors too is ready with a product and believes Indians will like hybrids because low fuel costs. Tata Motors has tied up with Indian Space Research Organization for hydrogen technology to run buses. It has also seriously looking at hybrid cars too. Tata is currently testing the Indica hybrid to be launched sometime this year. Initially it will be a micro hybrid of Indica as the electricity-run Indica would take time as the market is yet to mature.
In a price sensitive market, it makes sense because of the fuel efficiency these vehicles offer. Lower labour and manufacturing costs in India will make it possible for Tata Motors to develop the technology and price the hybrid car at par or slightly above comparable cars, say sources close to the company. The cost impact will be minimal to the end consumer if it is a micro-hybrid. However in a full hybrid, the cost will be comparable, about 5-10 percent higher.
There are talks of forming regulations for hybrid vehicles in India. A committee of leading Indian automotive officials from Bajaj, Ashok Leyland and Tatas and members from the Ministry of Surface Transport and Ministry of Heavy Industries are understood to be working together to form the hybrid vehicle regulations. The committee is considering adapting some of the global regulations on fuel efficiency and safety on hybrid vehicles for the domestic market.
International auto analysts say that before India gets carried away and starts launching hybrids and other cutting edge technology, it needs to catch up with some basics. For emissions, although much progress has been made in the last decade, it could close the implementation timing gap with Europe, the US and Japan.

International oil prices would continue to rise and this means more inflationary pressures on China.

China’s economic minders have always prided themselves on the fact that despite the country’s insatiable appetite for energy, its booming economy has remained largely insulated from fluctuating international oil prices.
But when prices hit $100 per barrel in early January, the unease among officials and pundits was palpable, Mysinchew.com reported.
“China is vulnerable precisely because it has never experienced an oil crisis,“ says Zuo Xiaolei, chief economist with Yinhe Securities.
“Our energy contingency planning is only in its initial stages and sharp increases in oil prices are bound to have a big impact on the country.“
The sharp increase comes at a challenging time for China, which is trying to shift gears and establish domestic consumption as its new driving engine.
While strong exports remain a significant force fuelling economic growth for China, the country’s mandarins have been trying to boost domestic consumption to bring the booming trade surplus down and reduce tensions with trade partners. In the US and Europe, China is often presented as a competitor for jobs and profits and is accused of manipulating its currency to preserve its dominance as an exporter.
But efforts to support domestic consumption and alleviate trade tensions now seem threatened by higher oil prices. “If all of a sudden people have to pay more for energy commodities they would naturally want to reduce their other expenditures,“ said a recent editorial in the Beijing Youth Daily, voicing public concern.
But what worries Chinese leaders most is the effect soaring oil prices would have on stubborn inflation they have been battling since last year. Nearly every month in 2007 has brought a new decade-high figure in inflation. Consumer prices were up 6.9 percent in November. In October they were up 6.5 percent.
Some economists have tried to point out that “core“ inflation, excluding energy and food, remains low while the surge in food prices simply represents the strength of demand for food products.
Food, however, remains by far the largest expenditure item for many Chinese households. Reports in the Chinese press have blamed ballooning food prices on rising fuel costs as farmers have struggled to make profit from selling their produce in the cities and having to cover costly transportation bills.
“Diesel costs more this year and I have to charge more for bringing my fruits into Beijing,“ concurs Deng Rui, who keeps a vegetable and fruit stall in the Tianzhu market in Beijing suburbs. The stall displays piles of oranges, apples and Beijing’s traditional winter fare of sweet potatoes.
“There is no shortage of anything this winter,“ Deng says, “but just about everything costs more“.
Economists’ projections about inflation in 2008 are not rosy either.
“International oil prices would continue to rise and this means more inflationary pressures on China,“ Tan Yaling, researcher with Bank of China told The Economic Observer newspaper this week. “One should not forget that China’s inflation index for 2007 excluded the adjustment of domestic oil prices“.
The Chinese government continues to control domestic retail fuel prices but as the global crude price skyrocketed from $70 a barrel in July to $100 last week, it has allowed prices at home to rise by nearly 10 percent.
Reflecting concerns about rising inflation and economy overheating, Beijing has said its monetary policy stance in 2008 will change from “prudent“ to “tight“--a change from a decade of economic management, which supported high growth.
China is already facing charges that its high-powered economy is the factor driving prices around the world. Aiming to ease fears that its growing thirst for imported oil will drive up already high prices, China issued a white paper on energy policies in late December, pledging not to disrupt international markets.
“China did not, does not and will not pose any threat to the world’s energy security,“ the document stated, aiming at fears that Beijing’s global search for oil and gas might create diplomatic friction and jeopardize other nations’ interests.

Mississippi soon will be on the front lines of the US defense against a disruption of oil supplies that would cause an energy crisis.
Congress last month approved a massive spending bill that contained $25 million to plan and purchase land for an underground facility that would hold 160 million barrels of oil in 16 salt caverns in Richton.
According to Attiesburgamerican.com, the reserve, which would be the nation’s fifth, is about a decade and a billion dollars from completion. But it’s already caught up in a congressional debate over the future of the Strategic Petroleum Reserve.
In an emergency, oil from the Richton salt domes would flow through a pipeline to Pascagoula, be refined and shipped through that city’s port to consumers in the East Coast and the Northeast.
The notion the federal government should stockpile oil was born of the 1973-74 energy crisis, when a Middle East oil embargo resulted in scarcity, increased prices and long gas lines.
Four salt-cavern facilities hold the nation’s petroleum reserve--two are in Louisiana and two in Texas.
The reserves have combined storage capacity of about 727 million barrels of oil, enough to replace all oil imports for about 55 days. The Richton site is part of a plan to increase the stockpile to 1 billion barrels.
President Bush wants to expand the reserve to 1.5 billion gallons. Sen. Thad Cochran, R-Miss., sponsored legislation to do that, but the Democrat- controlled Congress has not moved on the proposal. Cochran’s legislation is pending in the Senate Energy and Natural Resources Committee.
Committee chairman Sen. Jeff Bingaman, D-N.M., said it’s wrong to expand the reserve while there’s a debate over how it should be used.
“Until we sort out what its purpose is, we shouldn’t add to it,“ he said.
Bingaman and other lawmakers also want the Bush administration to stop adding oil to the reserves while oil prices are at near historic highs.
“Filling the Strategic Petroleum Reserve is having a counterinfluence on supply. Instead of easing the price pressure, it’s adding to it,“ Bingaman said.
The reserves are more than 90 percent full, but Bush made it a priority to fill them. Several companies provide oil for the reserves instead of paying the government royalties for drilling on federal lands. Sen. Susan Collins, R-Maine, and other Northern lawmakers whose constituents face high heating oil bills, wrote to Department of Energy Secretary Samuel Bodman last week asking him to stop filing the reserves.
“It makes no sense whatsoever for the Department of Energy to purchase more oil for the SPR ( Strategic Petroleum Reserve) at a time when prices are at record highs,“ she wrote.
But the Department of Energy says its acquisition of oil is too modest to have an impact on prices.
Cochran also supports the continued filling of the reserve - and increasing it to contain enough oil to replace 90 days of imports.
Other lawmakers want the reserve to be tapped more often to help keep the price of gasoline and heating oil down.
That idea also has been resisted by the administration - and opposed by the nation’s oil companies.
“This oil is best used in a national emergency,“ said American Petroleum Institute spokesman Bill Bush.
The reserve has been tapped twice to try to counter a disruption of oil supplies. The first time was in 1991 when the US was engaged in Operation Desert Storm in Iraq, a major oil producer.
Nearly 39 million barrels were sold to oil companies based on competitive bids.
In 2005, Hurricane Katrina’s destruction of oil production facilities in the Gulf of Mexico prompted the Bush administration to sell about 11 million barrels of reserve oil and loan oil companies another 9.8 million barrels.
But the reserve also has been used strictly for economic purposes. In 1996 and 1997, about 28 million barrels were sold by the Clinton administration to reduce the federal deficit.
It has also been tapped to help oil companies in need.
In 1996, nearly 1 million barrels of oil were loaned to Arco after the company’s Texas to Oklahoma pipeline ruptured. In 1998, 500,000 barrels were loaned to CITGO/Conoco when a shipping channel in Louisiana that fed the company’s refineries was blocked by the collapse of a dock.