Hybrids in the Third World?

Are hybrid cars too expensive for the Third World? While many consumers, investors, scientists, and environmental activists have focused on the importance of building hybrid cars for the U.S. market, it is in the emerging markets that the need for hybrids and other clean air technology may be even greater.

Over the past decade emerging markets such as India, Latin America, and China have seen the numbers of cars on the road increase exponentially. Reports published by the Chinese National Bureau of Statistics show that in just half that time the number of private cars in the country has nearly tripled, from 6.25 million to 17 million.

According to J.D. Power and Associates, Indians bought 1.2 million cars last year, and that figure is expected to rise nearly 10% annually over the next half decade. The growing population of cars in these countries is not without a concurrent environmental impact. A 2005 European Space Agency satellite study reports that pollutants in the sky over China have doubled in the past decade.

Yet to hold down costs, some cars sold in these price-sensitive markets are available without basic safety features like airbags and anti-lock brakes. Given the fact that in the U.S. hybrid cars cost thousands of dollars more than their internal-combustion cousins, it is unlikely that many new car buyers in the Third World would today be able to spend the extra money for a hybrid car.

Business Week