More Eco-Friendly Options Enliven Taxi Market

      August 21, 2014 12:31

      Toyota on Wednesday unveiled a taxi version of the Prius hybrid passenger car for the Korean market, the first time a foreign carmaker has launched a taxi version of one of their cars here.

      Hybrid cars run on both electric and gasoline engines.

      Hyundai, the No. 1 automaker in Korea, on the same day unveiled an LPG version of its LF Sonata modified for use as a taxi. It pitched the fact that the LF Sonata has received the highest grade in crash tests by the U.S. Insurance Institute for Highway Safety.

      According to a government study last year, around 99 percent of the 250,000 taxis here are powered by LPG. The government provides W221.36 in subsidies per liter of LPG (US$1=W1,022).

      There are no subsidies for gasoline taxis, but diesel taxis will get subsidies starting next year, so the current dominance of LPG taxis is about to end.

      ◆ Toyota Taxis

      The Toyota Prius is the first mass-produced hybrid vehicle, first rolling off assembly lines in 1997. More than 3 million of the cars have been sold around the world. Its strength is mileage. The Prius can travel up to 21.7 km per liter in the city, which is why Toyota is confident that it will make a good taxi.

      By removing options like rear bumper sensors, it lowered the price of the Prius taxi to W26 million, over W5 million cheaper than a regular model.

      Toyota's Korean office believes selling just 300 to 400 of them could be counted as a success. It hopes that the increased visibility of hybrid cars on the streets of Korea will go a long way in terms of publicity.

      ◆ Diesel Taxis

      From September of next year, diesel taxis will begin operating here. The government decided to provide W345.54 in subsidies per liter of diesel to taxis.

      So far, Renault Samsung, which rolled out a diesel version of its mid-sized SM5 passenger car, has been the most aggressive in attracting buyers among cab drivers and taxi companies. Renault Samsung vice president Park Dong-hoon said, "Most taxis are driven in cities, and we reduced the noise and vibration levels of our diesel model so it can compete with LPG taxis."

      Hyundai is considering a taxi version of its diesel LF Sonata. Some foreign carmakers are also looking into introducing taxi versions of their diesel models.

      Hyundai and affiliate Kia account for 95 percent of the LPG taxi market. Whether more taxi firms will shift to diesel or hybrid models depends on cost. The problem is that hybrid and diesel cars cost more than LPG or gasoline cars, and many taxi drivers are concerned about the noise and vibration associated with diesel engines.

      The diesel SM5 has a 1.6 liter engine, which classifies it as a compact under Korean regulations. As a result, cab drivers who own the diesel SM5 would have to charge compact taxi fares, which are W500 cheaper than those of mid-sized cabs such as the Hyundai YF Sonata and Kia K5. That would translate into smaller earnings.

      Lee Hang-koo at the Korea Institute for Industrial Economics and Trade said, "Each year, there is steady demand for 40,000 to 45,000 taxis, and the maintenance market is huge, which has prompted more carmakers to tap into the market. Many provincial governments are enforcing tougher emission standards, so we'll see growing interest in a wider range of fuel such as CNG."

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