The induction motor drive control system with low precision encoder has a compromise between performance and reliability, which is suitable for industrial electronic vehicles, such as electronic forklift. However, the inaccurate and delayed position signal degrades the performance of field orientation and speed control, especially in low-speed range. Thus, a vector control scheme for induction motor with low precision encoder is proposed. A hybrid speed observer is proposed for speed estimation, which combines Kalman filter and full order observer. The Kalman filter suppresses the disturbance signal from rotor angle. Then, the full order observer obtains the speed signal without time delay or bumps. The speed signal from hybrid speed observer is utilized in reduced-order flux observer for accurate rotor flux orientation. The proposed vector control scheme improves the performance of induction motor drive control system.