Taxies on road toward diversification

Taxi drivers ride in Renault Samsung Motors' SM3 Z.E. electric taxies that the automaker provided to Seoul Metropolitan City for a test drive at Seoul Square, in central Seoul, Aug. 29. Starting this month and through April, the 10 electric taxies will run on the streets of the capital city. / Yonhap

From hybrid to diesel-powered, differnt types of cabs to hit the road

By Park Jin-hai

Kang In-gi, a veteran taxi driver of 42 years, looks at a Toyota hybrid taxi Prius showcased on the first floor of the Seoul Transportation Center.

"I've been mostly driving Hyundai cars, but now I'm considering buying a Prius," he said.

For the first time since Toyota launched its hybrid taxi model last month, more drivers have started to consider other options in the monotonous Hyundai-Kia Motors dominant taxi market.

Another driver, Lim Heung-bin, said that if the Prius had no problems with after-sales service, he would be more than willing to make the switch.

Following the Japanese carmaker's lead, imported automakers also are considering entering the local taxi business, which accounts for about 45,000 cars a year.

Volkswagen sees its Passat as a good taxi model, while the Peugeot 508 also has a good shot of adapting to the taxi industry.

Nine out of 10 taxis in Korea are LPG powered Hyundai-Kia cars.

"Starting in September next year, the local taxi landscape could change, when the government provides subsidies for diesel-powered taxies," said Kim Phil-soo, an automotive engineering professor at Daelim University College.

"The taxi is a winner-takes-all industry. When word of mouth spreads that a certain type is ideal, the belief quickly spreads to the whole automobile industry."

Currently, only LPG-powered taxies are entitled to receive 197.97 won per liter government subsidies.

Toyota's hybrid taxi is on display at the Seoul Transportation Center in Jamsil, southern Seoul, Thursday. Toyota last month became the first foreign carmaker to launch a hybrid taxi here.
/ Korea Times photo by Park Jin-hai

Fuel lure

What lures drivers to the Hybrid taxi is its mileage.

The Prius, Toyota's first mass-produced hybrid vehicle, can travel up to 21.7 kilometers per liter in the city, which is why Toyota is confident the vehicle will make a high-quality taxi.

"It is pricier than a domestic one, but I think in three to five years the extra money spent on the foreign car would be recouped," Kang said.

It is priced at 26 million won, nearly 10 million won higher than Hyundai Motor's new Sonata taxi.

Toyota said that since the launch, its service centers had received five times as many inquiries from drivers than previously.

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

More than 3 million of the cars have been sold worldwide.

The new government subsidy policy will give diesel taxies a major boost.

Local companies as well as makers of imported diesel vehicles are carefully following developments.

From next September, more diesel taxies will be operating, as the government will provide 345.54 won in subsidies per liter of diesel to taxies if they meet Euro 6 standards.

"Diesels have great torque and power, not to mention good fuel efficiency," said Kim Joon-weok, a driver in his 60s. "The LPG taxies are also losing their price advantages. LPG fuel now costs just as much as diesel.

"When we (colleagues) gather, we often talk about which type of taxi may be more economical."

"Technologically, it is easy since we already have LPG SM5 taxies _ all you need is to insert a diesel engine," said an official of Renault Samsung Motors, which is rolling out a diesel version of its mid-sized SM5 passenger car.

The company has begun an aggressive marketing campaign to attract cab drivers and taxi companies.

"Some local taxi companies have tested out diesel taxies like the Hyundai Motor i40, and their response was quite favorable," the official added.

However, the SM5 diesel sedan has a Euro5 standard engine, which disqualifies the model from receiving the government subsidy. "Renault has been developing diesel engine that meets the Euro6 standards," the official said. "When the new engine is matched with the SM5 diesel, we have no reason to hesitate entering the taxi business."

Hyundai is also considering a taxi version of its diesel LF Sonata.

Electric vehicles have also joined the taxi industry of late. Although the market is incomparably smaller, the government is promoting EV taxis.

Seoul city is testing 10 electric-powered SM3 Z.E. taxies from this month until April.

"We provided our EV taxies, hoping that it will enlarge the overall local EV market as well as expanding the required infrastructure," said the Renault Samsung Motors official.

Market opening

Professor Kim said it was good that more taxies were running on other energy sources, but there was still a long way to go before the trend became widely accepted in Korea.

"Policies have been based on the perception that certain sources of energy are environmentally friendly for a particular kind of transport," he said. "Only buses using compressed natural gas (CNG) and LPG taxis are qualified to claim subsidies."

"Right now, vehicles such as CNG, hybrid, diesel and electric powered buses are used on the streets. Each energy source has its strength and weakness. What we need is not to limit energy sources for government subsidies."

Kim said that opening the market so all energy sources could compete for government subsides was the key.

But officials were reluctant to make such a change because so many policies were based on the old energy system.

"Making a hole is difficult, but making it bigger is not so difficult, Kim said. "Free competition, after all, will make the public transport market more competitive and healthier in the end."