Tax breaks not needed as market for hybrid vehicles still in its infancy: minister Financial incentives are not needed to encourage private car owners to switch to hybrid cars as the market for eco-friendly alternatives is still in its infancy, the environment minister said yesterday. During a Legco session called to discuss environmental initiatives contained in Chief Executive Tung Chee-hwa's policy address, Democratic Party legislator Law Chi-kwong asked whether the government could offer incentives, such as reduced vehicle licensing fees, to promote wider use of cleaner cars. Mr Law said hybrid-engine cars that ran on both electricity and petrol could help improve the city's air quality. 'These hybrid cars are much more expensive than conventional petrol cars. If the government provided more incentives, it could stimulate the market by attracting more car manufacturers to enter the market,' he said. 'As a result of more competition, the prices of these hybrid cars might drop and could become more affordable.' The government has been providing hundreds of millions of dollars in subsidies to mini-buses and taxis to switch to liquefied petroleum gas and offering tax breaks for cars imported to Hong Kong that are powered entirely by electricity. But Secretary for the Environment, Transport and Works Sarah Liao Sau-tung said providing incentives to stimulate the market for cleaner vehicles would be inappropriate. She said the problem was not with high prices but with the level of supply, which could not meet rising demand. 'I visited a hybrid car show recently and I found that the cars were popular among drivers. I was also told that it might take four to six months for a car to be delivered,' she said. 'So the problem is more about excess demand than a lack of incentives. We don't want to spend taxpayers' money to offer incentives while failing to stimulate the market.' Dr Liao owns a Toyota hybrid-engine vehicle. Ringo Lee Yiu-pui, deputy president of the Hong Kong Automobile Association, said tax breaks would encourage carmakers to offer more models of cleaner vehicles. 'If the government won't take the first step, it would be equally difficult for the drivers to make the first move even though they really want to protect the environment,' Mr Lee said. But a major motor car trader who did not wish to be named said a tax break might not necessarily boost sales. 'Just take a look at the tax break scheme for electric vehicles. It almost failed to create a market at all, and now only a handful of big companies own such cars,' he said. The government waived the first registration tax for electric cars from 1994 in a bid to reduce air pollution.