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While the Auto Industry flourishes, it is worth a check as to its effect on the economy, environment and whether the infrastructure is geared to take the load.Country on wheels: Indian auto sector is 7th largest in world
Alan Roger Mulally is the CEO of Ford Motors and the man credited with turning around the fortunes of the iconic US car-maker. Last week, Mulally and a few other big gun car manufacturers were in attendance at the Auto Expo in New Delhi. As huge crowds thronged the show to gawk at the beauties on display (and not just the ones on wheels), they seemed to match the enthusiasm of car honchos like Mulally, who are looking upon India with fondness, terming it a "tremendous market." While Mulally chose to launch his company's new SUV Eco Sport here - before it made its debut in about 100 markets across the world - others like Nissan, BMW, Audi, Mini and Jaguar unveiled their new vehicles to rapturous audiences.
Most of these cars would be on the roads in a few years' time. Auto enthusiasts are delighted but many are already dreading the havoc that additional vehicles will create on India's already over-stretched roads. In an ominous sign of things to come, it suddenly became very hard to drive around, the week the Auto Expo came to Delhi. This, when only a 100 people per thousand own cars in Delhi. "Imagine what it'll be like when we get to 450 cars per thousand like in the West," says Anumita Roychowdhury of the Centre for Science and Environment (CSE).
The explosion on India's roads, though, is not a recent phenomenon . Ever since the economy opened up, the number of vehicles have been steadily rising along with concerns about lack of urban planning , traffic mismanagement and parking. Despite this, the auto market in the country has shown phenomenal growth. Auto analyst Murad Ali Baig attributes it to cars increasingly becoming objects of desire than of utility. "If someone wants to buy a car, they will go ahead and buy it. They won't wait for the parking to get better or the traffic scenario to improve," he says. Not surprising then that India's love affair with wheels is growing. Car sales stood at 2.5 million in the last financial year. And even though this year was touted as a bad year, certain segments of the industry like diesel cars and two-wheelers still did well and the growth story continued. The future is expected to be rosy as well. According to a report released last week by consultancy firm Ernst & Young, India's passenger vehicle sales and production is expected to grow between 14 to 16% by 2021, reaching over 9 to 10 million units annually.
What's propelling this roller-coaster ride is obviously the country's 250 million-strong middle class which is on a consumption over-drive and impatient to flaunt that cool set of wheels. But it is the potential of the luxury car segment (cars costing upwards of 12 lakh) that has many salivating (and a few dreading the prospect of bigger jams). Already, the luxury car market is a billiondollar business in India, fuelled not just by demand in big metros but also smaller towns. In 2010, a group of more than 150 local businessmen in Aurangabad created a record of sorts by placing an order for a Mercedes Benz each, which served as an eye-opener to the humungous amount of big money and aspiration in small cities.
As more choices become available and customers become discerning - Baig says that rich buyers would soon be choosing models like their forefathers picked out horses for their stables - it may be good news for the economy. But the old bugbear of poor traffic infrastructure and chaotic urban planning will come back to haunt those riding high on fancy wheels (and even those who aren't ). Many ideas have been tried as possible solutions - like encouraging the use of bicycles (flopped miserably since cycling is seen as a poor man's activity) and use of CNG to combat pollution (partial success - even though air pollution levels have dipped, vehicular pollutants are still responsible for 72% of air pollution in Delhi). Proponents of a better public transport system have hailed the success of the Delhi Metro as a viable model to follow in other cities. But quick back-of-the-envelope calculations show that may not be the only viable solution. CSE's Roychowdhury points out the link between the large number of two-wheelers on Indian streets and an inadequate public transport system. "The cheapest Metro ticket costs Rs 10. The cost of using a twowheeler is about a rupee a kilometre . A motorcycle or a scooter then is cheaper to run than using public transport, "she says.
But topping the list of issues that need urgent attention is the problem of parking. Donald Shoup, professor of urban planning at University of California, Los Angeles, says that it's time India seriously looks at paid parking on streets and in residential areas."The country has some of the most valuable land in the world. It should be monetized properly so that the resultant revenue can help to improve public transport and infrastructure." Many would cry foul at what may seem like a drastic step. But such drastic measures may be the bitter medicine required so that a country on wheels does not get stuck in the mother of all traffic jams.
Country on wheels: Indian auto sector is 7th largest in world - The Times of India
Unless more attention is paid to Urban Rapid Transport system and the infrastructure revamped, it might lead to serious issues.
Would that be correct?
