Toyota and Maruti Suzuki are intensifying their efforts to promote hybrid vehicles in Uttar Pradesh, India's most populous state. The two Japanese automakers are leveraging a variety of marketing strategies, from social media ads to direct telesales, to capitalize on new tax incentives that have stirred controversy among their competitors.

The recent tax waivers in Uttar Pradesh have created a rift in the Indian auto industry. Rivals such as Tata Motors, Mahindra & Mahindra, and Hyundai have expressed concerns that their sales of purely electric vehicles (EVs) could be negatively impacted. Despite their attempts to overturn the July decision, these companies have been unsuccessful, and there is concern that other states might implement similar policies.

At the Sunny Toyota showroom in Lucknow, Uttar Pradesh's capital, sales staff are reaching out to past visitors to highlight the benefits of the new hybrid tax incentives. Customers can now save approximately $15,800 on the luxury Toyota Vellfire and about $5,200 on the Camry sedan.

An Instagram advertisement from the dealer promotes the offer with a message: "Save big... Order now and get your hybrid vehicle delivered right to your doorstep."

This marketing push follows a rare victory for Toyota, which successfully lobbied the state to grant tax waivers on hybrid cars. This decision, affecting around 10% of India's car sales, translates to savings of roughly 10% for hybrid buyers.

In India, while EVs are taxed at a federal rate of 5%, hybrids face a 43% tax, close to the 48% rate for gasoline vehicles. State taxes, which vary by region, are added on top of these rates.

Globally, Toyota has focused more on hybrid vehicles—those combining gasoline engines and batteries—rather than purely electric models. This strategy appears promising as concerns over charging infrastructure and high EV prices continue to dampen global demand for electric cars.

In Uttar Pradesh, both Toyota and Maruti Suzuki sales teams report a surge in hybrid vehicle inquiries. Sales targets have been set high, with Maruti's salespeople aiming to sell at least 250 hybrid cars per month.

Rahul Bharti, Maruti's executive director for corporate affairs, noted that showroom inquiries for hybrids have nearly doubled since the tax benefits took effect. Dealerships are also promoting the incentives through online and WhatsApp ads with slogans like "Enjoy the nil road tax offer" and "Say Goodbye to Diesel."

At the Sunny Toyota dealership, sales teams are targeting customers interested in gasoline or diesel vehicles, encouraging them to consider hybrid models due to the new tax waivers.

Some dealers are advising customers to act quickly, as the duration of the scheme is uncertain. Praveen Saxena, a sales manager at a Toyota showroom in Kanpur, reported a 50% increase in hybrid car sales following the tax waivers.

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