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Is There a Third Way to Think About Low-Cost Cars?

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By Ethan Arpi and Rob Katz

While discussions of Ratan Tata’s 1 lakh car – and other entrants to the ultra-cheap car market – are nothing new to and many other blogs, the concept received another burst of publicity over the weekend when New York Times columnist Thomas Friedman featured it in a piece entitled No, No, No, Don’t Follow Us. Friedman – whose column is syndicated in newspapers throughout the world – argues that while Americans don’t occupy the moral high ground when it comes to driving, following the American model of motorization would be catastrophic for India’s economy and its environment.

Friedman’s point is well taken: if India doesn’t leapfrog the American model, it risks choking its economy on smog and traffic. (See China; Beijing for a sobering look at the potential future.) Not convinced? The statistics speak for themselves: There are 11 personal vehicles for every 1000 eligible drivers in India. China, another country inundated by the tide of urbanization, has nine personal vehicles per thousand eligible drivers. How many does the United States have? The answer is staggering: 1,148! Anyone who has sat in traffic in Mumbai knows this is no joke – at 11 cars per 1,000 eligible drivers, India is already maxing out its city’s streets.

One possible solution – the American model – is to simply build more roads to accommodate more cars. India’s already trying that – with little success. Friedman notes that a recently-opened highway in Hyderabad has already reached capacity, suffering from the very bottlenecks it was built to prevent. The perverse incentive of road construction is that it encourages private car ownership, which, in turn, encourages more road construction. It’s a vicious cycle that ends by destroying cities that were originally meant to be saved.

We argue that there is a third way for India: It should neither replicate America’s car-centric model, nor should it try to build its cities without sufficient mobility. Rather, based on smart planning and good policy, Indian cities can be shining examples for other cities around the world, accommodating unprecedented growth while improving the economic, environmental and day-to-day lives of their residents.

As Friedman suggests, clean mass mobility is the way to go. That’s not to say that cars should be excluded from the city, but they should be priced in a manner that accounts for the externalities, like traffic congestion and air pollution, that they create. Using tools like parking regulations, congestion pricing, and high emissions standards can improve public space while generating revenue for mass transit – which can meet the needs of all city dwellers. India’s streets are also very unique, crammed with rickshaws, two-wheelers, and bicycles, so any effort to improve mobility must also carve out a significant space for them.

Already, cities like Pune, Pimpri-Chinchwad, Indore, Bhopal, Vijaywada, Vishakhaatanam, Jaipur, Mysore, Ahmedabad, Surat, Rajkot, and Delhi are developing bus rapid transit systems and other well-planned public works to allow urban residents affordable, clean, and convenient transport options. In fact, India’s National Urban Transport Policy has made mass transit – like bus rapid transit systems – a priority.

But there are still serious obstacles. The personal automobile has already caught the public’s imagination in this country, whose burgeoning middle class is developing a voracious appetite for newly affordable goods. Among Bollywood elites, the latest trend is giving super-expensive cars as presents to friends and colleagues. It’s only a matter of time before these customs and habits trickle down to the masses, albeit in a cheaper form.

With the looming threat of global warming and energy insecurity, the stakes are high. According to Anumita Roychowdhury, Tata Motors has global ambitions, planning to build a retail network across Africa and Latin America. Other companies like Hyundai and Nissan are also promising to enter the market and scale their businesses to other continents. In this respect, India is a testing ground, a pilot project of sorts, for dealing with really cheap cars. If it can come up with a solution – a third way, like we suggested above – for dealing with rapid motorization, it will skillfully position itself as a model for other countries to emulate. But if it can’t, India will have doomed itself to a never-ending transportation nightmare, and other countries, soon to be flooded with cheap cars, will be left groping in the dark for a solution.

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  • It strikes me that city planning and replanning and building is a priority over transportation. Creating smaller hubs of services, employment,schools, and housing within easy walking or biking distance could help decrease traffic and car needs. Large transit parking on the outskirts of the bottle necks also would be helpful but of course that approach along with the transit system construction and maintenance is going to take up a lot of government resources. Perhaps most important is the role modeling of what ever ‘green’ methods are going to be tried. Who do people admire and respect? How do the members of parliment travel? How do the entertainers travel? Let those who propose to be leaders step up first!

  • About not car ownership being the problem but its use: it happens that there is a strong corelation between ownership and use (said professor Primus more than a decasde ago). In fact it is indeed ‘mobility needs’ which need to be addressed: it is not about riding kms or miles, but about access to activities and participation in society. It strikes me in many developing countries that the poorest have to cover the largest distances to economic centres and have the least possibilities to travel. Bringing the jobs and education opportunities closer to them would be not only a more sustainable but also a more equitable approach.

  • Just came across this article about Tata Steel from Ethical corporation and thought I should share:

  • Rajiv Kumar Nath

    I dont think cheap car is a solution to ours transporation problem instead of it we will think about how to promote public transit system and also how we make will aware the people about it

  • Sarath Guttikunda

    Once in market, the Rs.100K car will have its bonanza. Anyone who can afford a motorbike for Rs.50K, will be able to buy this car. Five years ago, this was still an up and coming market, but given access to bank loans, this is reality.

    Personally, owning a car is not a problem. We cannot stop people from owning a car, but the problem is use of this new car. Is the person buying, aware of consequences and losses he/she going to incur in the name of luxury?

    I agree with Dario.. car industry brings benefits to the economy… but they come at an expense. Besides focusing on the infrastructure development or lack of it, learning from SUT examples, equal amount of focus should be on public awareness on these issues.

    This has become a game of visual perception. People feel the pollution on a daily basis, see more and growing traffic every day, and automatically associate all the pollution to the traffic. One of the reasons people travel in cars is the pollution – if not from the diesel buses (which are no more in Delhi), the road dust, which more than compensates for the buses. With growing congestion, the dust problems are even more so on the roads. Even among the cars, the ratio of diesel to gasoline is increasing adding to pollution levels.

    The BRT lanes are still in construction and likely to take at least one more year before new buses are on road and functional in Delhi.

  • “without sufficient mobility…” I keep thinking about that phrase and I feel awkward. We are already hypermobile, maybe we need to rationalize mobility for the higher-income and satisfy the mobility needs of the lower income (and the time-poor, and the access-poor). I’m not sure if we should think in terms of “sufficient” or “insufficient” mobility. Thanks a lot for your article, it complements nicely the one from Friedman (which is superb).

  • Dario Hidalgo

    India has the great opportunity to learn from others: US has proven that increasing road capacity to face congestion is the same than “loosening your belt to fight obesity”… India is in a position to do much better: improve the opportunities for bicycles and pedestrians, create mass transit networks including low cost Bus Rapid Transit systems, maintain and enhance mixed used corridors, use technology to improve the quality of your travel experience (bus managment and user information systems)… in short apply the successful sustainable transport principles that make London, Paris, Curitiba, Bogota, Singapore among others references for quality urban environments and productive cities.
    It is true that car industry brings benefits to the economy… but they come at a very big expense in hours lost in traffic jams, pollution, accidents and urban sprawl…