Fleet News

Crunch talks on Prius subsidy

A CRUNCH meeting was planned this week between Toyota and the Government-funded Powershift programme to finalise vital grant payments for the manufacturer's hybrid Prius model. Fleets are expected to be the key market for the petrol/electric- powered vehicle, to be launched in October at the Birmingham Motor Show. But with a price tag expected to be as high as £18,000, grants to entice corporate buyers are vital.

The Powershift programme provides grants of up to 75% of the total cost of converting internal combustion engines to run on alternative fuels, based on the reduction in emissions compared to legal limits achieved. However, hybrid vehicles are not based on any conventional model, so the organisation has no basis on which to establish a cut in emissions for grant payments.

The Honda Insight, which had its first full week in the showrooms this week, is already offered to fleet buyers with a £1,000 rebate off the list price through Powershift. With Honda's grant for the Insight already in place, it is a clear sign the problem can be overcome.

With just a month to go before the European version of the Prius goes on sale, Toyota executives will be eager to confirm a grant as soon as possible. Powershift has already indicated the Prius will receive a similar level of grant to the Insight, but said no definite figures had been agreed.

Mark Hall, general manager of fleet sales for Toyota, said: 'We will be presenting the whole concept to Powershift and that will start the process of deciding the level of the grant. We do not anticipate any issues cropping up that will cause a problem.'

Honda and Toyota are predicting low sales volumes at first, with 200 and 1,000 annual sales respectively. They also face initial uncertainty from buyers over residual values, with both CAP Motor Research and Glass's Information Services predicting three-year/60,000-mile service intervals of low to mid-20% levels.

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