Cheapest car: Beyond rhetoric By S L Rao 28 Jan 08(http://deccanherald.com/Content/Jan282008/editpage2008012748935.asp)
The arrival of Tata's Nano car should be a wake-up call for cities like Bangalore.
The design of the Rs one lakh car by Tata marks the coming of age of Indian manufacturing. Indian manufacturing has rarely developed original products by itself. This is clear from the total number of patents in force in India in 2004 which was 6,406; 1,82,385 in China, and worldwide 2004 was 5.4 million, while the Tata Nano alone is believed to have resulted in filing of 200 patents. The Tata Nano is the first product from India designed and developed from scratch to fit a price target. The end product is a real car and not a simulation of one.
We must celebrate this triumph of Indian engineering design, development and scaling-up. It will set off a rush of similar attempts by Indian companies in many industries. It marks the coming of age of Indian manufacturing, not as imitators but as innovators. India's pathetic 15 per cent share of manufacturing in GDP versus 50 per cent for services will grow rapidly because of the Tata Nano. We can expect many manufacturers of other products, not only cars, to start designing and manufacturing in India.
The Tata Nano could lead to total chaos in Bangalore (and other cities) already with grid locked traffic.
Unrestricted rise in ownership and usage of cars will severely damage the quality of peoples' lives as roads get more crowded, parking becomes even more difficult, pollution and its consequent diseases rise further. Tata Nano, priced at Rs 1 lakh (around Rs 1.40 lakhs on the road), is about half the price of presently available cheap cars. Its introduction will lead to drop in prices of second hand cars to levels (for the cheapest) that are close to prices of two-wheelers.
Consequently, sales of scooters and to a lesser extent motor cycles will dive. Rural use of motor cycles might continue to increase as will niche use of specialised two-wheelers, and use by the really low-income groups.
Many scooter buyers will graduate upwards to cheap second hand cars. Total replacement of two-wheelers by cars is unlikely because of the comparatively high running and maintenance costs as well as of parking for a car, and the higher capital costs for most cars. There is no doubt though, that the number of cars will increase exponentially because of the arrival of the Tata Nano.
We must not revert to the days of licensing and control to restrict the manufacture of more and cheaper cars. Nor can we ask those who do not have cars, that they should not have them even when they can afford them, as with the Nano.
The answer obviously is to improve the roads and traffic flows. However, almost invariably, municipal projects in Bangalore are subject to enormous delays, shoddy execution so that corrections at high cost are soon required, costs spiralling out of control, enormous inconvenience and danger to ordinary citizens and rampant corruption.
The millions of World Bank dollars borrowed and spent some years ago to repave footpaths and resurface roads have left us with both footpaths and roads in worse condition.
The hundreds of crores spent on de-silting the drains, have not led to anyone seeing even one of the thousands of trucks that should have carried the silt or the dumping grounds that should have had mountains of silt on them. The years of delay in building the many flyovers that were to solve traffic congestion have when built only moved the congestion beyond the flyover because no thought was given to widen the roads for carrying the traffic.
Bangalore will soon have a new airport that will charge high usage fees, close to the cost of some flights, with no speedy way to reach it, and costs of reaching the airport that will be as high as the air travel charges. Except for the early years of building the Calcutta metro, no other city has allowed the almost closure of its principal artery (MG Road) for the years it will take to build an overhead rail line as part of a "metro" project.
Nor has any serious thought gone into planning and then implementing a coordinated traffic management programme. There are no coordinated traffic lights (made by IIT in Bangalore!), no lane discipline, few visible traffic policemen, poor planning of one way roads, no exclusive pedestrian areas even in crowded markets, and no firm attempt at road widening as in Hyderabad or Chennai.
Impractical suggestions like allowing cars on roads on any day with only odd or even license numbers must be replaced by tough monitoring, intolerance for corruption, and committed and efficient management so that time and cost overruns are prevented and quality standards ensured.
Bangalore is burdened with a non-existent work culture and gross inefficiency amongst its municipal employees and traffic police. The speed and efficiency of construction and traffic management have to improve. The arrival of the Tata Nano, a low priced small car and the many others that will follow it, should be a wake-up call to Bangalore.
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