In India, One Cheap Car Could Go a Long Way

By Emily Wax
Washington Post Foreign Service
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.

The Institute of Road Traffic Education recently estimated that in New Delhi alone, the number of traffic offenses is 146 million -- per day. India's parliament has said that expanding the roads is key to attracting and keeping multinational companies, and to giving motorists space to drive.

"Poor infrastructure is an issue," said Commerce Secretary G.K. Pillai. "We need to expand our roads, and we have to keep working at it."

Then there is pollution. Only eight of every 1,000 adult Indians own a car -- compared with about 770 per 1,000 American adults -- but India's emissions of greenhouse gases are rising fast. Experts say that as more of the country's 1.1 billion people buy cars, India could soon overtake the United States in emission levels.

"Can you imagine if even half of the 1.1 billion Indians owned a car?" said Mahesh Mehta, an environmental lawyer in New Delhi. "We should not be following the Western model of car ownership. I think this will be disastrous in India."

While the Indian government begins to widen roads, Mehta has been lobbying for better public transportation. He said, however, that no one wants to listen.

"I am very worried, since a car is status and everyone wants that in India today," he said.

Marketing campaigns by Tata and other car companies seem to play into the idea of the car as a symbol of wealth. Huge billboards show pretty housewives cozying up to their beaming husbands and their new cars, with slogans like: "Welcome to civilization" and "Your American relatives are not the only ones who can enjoy the good life."

Tata has said it will offer trade-in deals for motorcycles and mopeds. And even driving schools are expanding in preparation for the 1-lakh car.

Saji Kumar, owner of Pradeep Driving School in Kochin, said the cheap cars will be great for business. But he also said that traffic is so bad, he often watches with horror as mopeds drive on the sidewalks during what he calls "Indian rush hour, which is pretty much all the time." He then offered some advice for Indians wanting to buy their first car.

"Please keep your car parked outside your house. Use your moped instead," he said, with a chuckle, but then looked very stern: "I know we all love cars. But how can we all fit?"

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