In India, One Cheap Car Could Go a Long Way
Saturday, August 25, 2007
K Every afternoon when Sudheer Mahanan, a government forest warden, picks up his two children from school, he is forced to squeeze them onto his moped.
As they speed over monsoon-drenched potholes and weave around meandering cows, his 5-year-old daughter, Harichandana, gets smushed between the seat and the handlebars. Seated in the rear, her 11-year-old brother, Harikrishna, hugs his father's waist and jostles for space with his heavy bookbag fastened on his back. Sometimes, the children look terrified, as when a truck cuts them off or a bus screeches to a stop within inches of their moped.
"I just don't make enough to afford a car as of yet," Mahanan said as he pulled out of traffic one day recently and watched other mopeds roar by, some with infants teetering on their mothers' laps. "But to own a car -- oh, it's something I want. It is every family's dream."
In many of India's boomtowns, a car is a quintessential part of the middle-class dream, a symbol of status and comfort that helps a family arrive in style, without a layer of grime from the choking pollution or soggy, mud-stained clothes from the rain.
That fantasy may soon be within reach of families like Mahanan's. An Indian automaker is set to roll out the world's cheapest car early next year in what is being called a revolution by those in the industry and a nightmare by environmentalists and urban planners worried about India's already harrowing traffic and overly congested roads, not to mention lack of parking.
The manufacturer, Tata Motors, has provided few details about its new, four-door vehicle other than its sticker price: about $2,500 -- 100,000 rupees, also called 1 lakh, in Indian currency. Dubbed the "1-lakh car," it will cost half as much as the lowest-priced cars on India's roads today.
"Owning a car will become like owning a TV or air conditioner. It's not a dream. But it is a necessity," said Azad Pathan, who owns the largest Tata dealership in Thiruvananthapuram, the capital of Kerala, a state in southern India. "This will be huge. There's been a boom. Now, many Indians are on huge credit sprees. But the real question is: Are the roads ready?"
The cheapest car in the world is being released during a time of good fortune for many Indians. While two-thirds of the country's population still struggles on $1 a day, millions of people here have emerged from grinding poverty into the lower middle class. The Asian subcontinent's largely service-based economy has been growing 8 to 9 percent a year, and World Bank studies estimate that India's middle class will expand from 50 million people today to more than 500 million by 2025.
"Because of India's rise, the 1-lakh car is going to be a revolution," said Radhakrishnan Nair, chief executive of Technopark, a large office complex with 120 service companies in Thiruvananthapuram, where the newly paved parking lot is filled with inexpensive and mid-range cars.
Nair said he has already seen many well-paid young college graduates take advantage of low-interest loans to buy cars. "Few people want to take the bus anymore," he said. "If you are doing well, you want a car."
How those extra cars would affect the roads here is an open question. Traffic in India is already a mind-boggling, exhausting experience. In Mumbai, the country's financial capital, a 40-mile drive can easily take longer than three hours. The roads often seem like a circular parking lot, where savvy vendors take advantage of the captive audience, hawking cold drinks, magazines and books to ease the pain.
There are few rules of the road -- no one stays in a lane, and everyone honks the horn all the time. Drivers are generally advised to let any car or cow bigger than their car go ahead.