Can India really afford cheap cars?

The news that GM India is poised to launch a 'two-lakh' car took me back to an incident in Lucknow in March
last year.

I had almost tripped over a scooter lying on its side in the dust, its front wheel still spinning. Moments before it had been carrying a family of four, plus chicken. Now, they were all on the ground, except the chicken which had run away.

You can't travel long on India's crowded roads without stumbling on a crash of some sort. This Lucknow family just lost a chicken. About 90,000 people lose their lives on the roads every year — and only 5% of them are in cars.

Hence, of course, the appeal of the one-lakh Nano, and of GM's slightly pricier competitor, promising as they do to put relatively safe motoring within reach of tens of millions of ordinary families.

Less appealing, of course, is the projected surge in pollution. If these cars sell in anything like the numbers their manufacturers hope, they will catapult India into the premier league of carbon emitters — casting doubt on the country's new-found commitment to tackle global warming.

Once the climate cost is factored in, there's no such thing as a cheap car. India is acutely vulnerable to climate chaos, and some of the very same people who'll benefit from the Nano will also lose out as wild weather wreaks havoc on the country's agriculture.

Does safer, smoother travel for middle-income Indian families have to come at the price of the planet? Do we always have to choose between protecting the environment and lifting people out of poverty? Not a bit of it. There's growing evidence that smart innovation can make life sweeter as well as more sustainable. Forward-looking think tanks like Malini Mehra's Centre for Social Markets, or Forum for the Future in the UK, argue that the best hope to win public support in the fight against climate change is to focus on this 'opportunity agenda'.

So, how could this apply to the Nano? Petrol-powered, it's a great social revolution, yes — but an electric Nano could be all of that and an environmental one, too. It would be ideally suited to the sort of short, urban hops that will constitute the vast majority of its use, so its limited range wouldn't be a problem. It could be recharged by solar power while its owner is at work or even out in the fields. Standing idle, the Nano's battery could trickle power into the grid — helping to smooth out the network's notorious instability.

And the innovation doesn't have to stop there. You might not be able to afford an electric Nano — but why own something that you don't use every day? So what about a state-sponsored Tata Zero Carbon Car Club, of the sort springing up across European neighbourhoods, giving people the benefits of using a vehicle when they need it, without the hassle and cost of owning one when they don't? It could help cut congestion, too: all the evidence suggests that car club members drive less than private car owners — because they don't feel they have to justify their hefty investment in their vehicle by using it in preference to the bus or metro.

But surely all this simply wouldn't be affordable? Well, not necessarily — not if the government grasped the nettle of subsidy reductions on the one hand, and carbon trading on the other.

The government spends billions of dollars a year on fuel subsidies — effectively making pollution cheap. If some of that went instead to developing 21st century clean transport — both personal and mass transit — it could bring dividends. After all, as the age of cheap 'easy' oil stutters to a close, investing heavily in fossil-fuelled infrastructure now is about as visionary as sinking your fortune into sailing ships 100 years or so back.

The dawn of a worldwide carbon market really can't come too soon for India. With its per capita emissions a fraction of those of the West — and even China — the country could expect to earn billions from selling carbon credits. That could be another source of revenue for cleantech R&D — and another source of opportunity for Indian business, as it fights to compete in a low-carbon global economy.

It all calls for fresh, not to say courageous, thinking — always a rarity in politics. But the Nano might help here, albeit in unintended ways. If a swarm of the one lakh miracles slows the pace of the capital's traffic from sluggish to stationary, it might convince even the most sceptical minister that there has, surely, to be a better way.
http://timesofindia.indiatimes.com/All-That-Matters/Can-India-really-afford-cheap-cars/articleshow/4653456.cms

'Indian customers are smart buyers’

Honda Siel Cars India president and CEO Masahiro Takedagawa has been managing activities of the Honda group in India and Asia Oceania region for the past three-and-a-half years. Mr Takedagawa outlines Honda’s plans for India and the launch of the premium small car, Jazz. Excerpts:
What technology do you plan to bring with the Jazz?

First of all, Jazz is a sister car of the City that was very well received in the Indian market. The platform of the cars is almost same. However, driveability of Jazz will be different. It will be very sporty. In terms of utility, it offers plenty of legroom and cargo space.

There has been much experimentation with the styling of the Jazz. Will there be many variants of the car?

There will be only one variant initially. It is a different car and will set new standards for the hatchback segment. It’s a shift from our policy for the City and the Civic. Of course, there will be many options for colours. This is to minimise the level of stocks which dealers or suppliers have to keep for several variants.

What is the progress on the diesel version of the City and the Jazz for the Asian market?

We have around 400 engineers, who are free from F-1 activities to develop small diesel engine, power train as well as next generation hybrid engines. As already announced, a small diesel engine project has been kicked off. We are working on different engine sizes and development could take 2-3 years.

What would be your strategy to ensure stable demand for the Jazz?

The market has changed due to the economic slowdown and the depreciation of the rupee. We are achieving above 70% of localisation. The components used in the Jazz are same as in the City. However, the Jazz will benefit from the lower excise duty allowed on small cars. Jazz will give the best fuel efficiency in that segment. We will target those customers who appreciate the drive. Indian customers are smart buyers and they appreciate the value given by Honda.
http://economictimes.indiatimes.com/Interview/Masahiro-Takedagawa-President--CEO-Honda-Siel-Cars-India/articleshow/4586653.cms