http://www.reuters.com/article/basicindustries-SP-A/idUSDEL17439320070627?pageNumber=1&sp=true
India's "people's cars" spur green nightmare fear
Wed Jun 27, 2007 12:33AM EDT
By Alistair Scrutton
NEW DELHI, June 27 (Reuters) - It may be an Indian consumer's dream
-- cheap cars for $2,500-$3,000 within reach of millions of a
swelling middle class. But it could also prove to be a traffic and
environmental disaster.
Nissan Motor Co. (7201.T: Quote, Profile, Research) and Renault SA
(RENA.PA: Quote, Profile, Research) announced last week they were
studying a $3,000 car to compete in India against Tata Motors Ltd.'s
(TAMO.BO: Quote, Profile, Research) planned low-cost "People's Car"
targeted at around $2,500 to hit the market next year.
For its supporters, cheap cars like these are what the Volkswagen
Beetle (VOWG.DE: Quote, Profile, Research) was to Germany or the Mini
to England
-- the spoils of an economic boom for aspiring middle classes. -- the
spoils of an economic boom for aspiring middle classes. To its
detractors, India will see an explosion in traffic and pollution on
its already clogged roads from its more than 1.1 billion inhabitants.
It will add to India's CO2 output just as many Western nations push
the Asian giant to control emissions.
"India just can't cope with this kind of pace of expansion," said
Anumita Roychowdhury, associate director at the New Delhi-based
Centre for Science and Environment.
"It's just not sustainable, whether from an environmental point of
view or in terms of congestion."
The World Bank this year said air pollution in India was already "of
great concern".
India has low car ownership rates -- there are 7-8 cars per 1,000
people compared with 300-500 cars per 1,000 people in many Western
nations, but annual passenger vehicle sales in India are expected to
double to 2 million units by 2010.
In New Delhi alone, more than 200,000 vehicles are added to its
streets every year, where they battle with cows, rickshaws and
motorbikes for space.
It's all part of a middle class that will expand by 10 times from its
current size of 50 million to 583 million by 2025, according to
consultancy firm McKinsey.
SWELLING MIDDLE CLASS
"It's a colossal market," said India's well-known auto columnist
Murad Ali Baig. "The low-price car market is already robust. Imagine
what will happen when even cheaper cars are available?
"The question is -- where are all the bloody roads to cope?"
The government is busy trying to build and widen highways across the
country, including a highway system that will link New Delhi, Mumbai,
Chennai and Kolkata.
But air pollution is already at "critical levels" in more than half
of India's main cities, according to the Centre for Science and Environment.
Environmentalists say that while new cars will have emission limits,
these are still 10 years behind European levels.
"Cars in India will be on the road for between 10 and 15 years and no
one will monitor to see if their emissions worsen over the years,"
said Roychowdhury.
"India is creating a car culture just when other countries are trying
to learn from their mistakes."
But many Indians who weave their motorbikes in between traffic would
jump on the chance of the comfort of a car.
"If I can buy a 30,000 rupee scooter, then I can now hope to buy a
car for 100,000 rupees when it comes out. Now, people like me can
think about owning a car," said Aman, a 39-year-old Indian chauffeur
who earns about $150 a month. "I drive cars for my employers. Maybe I
will drive my own car one day."
Officials say they are boosting public transport -- pointing to metro
plans in major cities. In New Delhi, the government's switch of buses
and taxis to cleaner compressed natural gas (CNG) cut carbon monoxide
levels by up to 80 percent.
Companies like Tata say they upgraded all their four to six cylinder
engines to meet international emissions standards. The company has
manufactured CNG versions of buses.
"This is a democracy. We can't stop people buying cars," said P.K.
Nanda, director of the government-run Central Road Research
Institute. "We don't want more personalised vehicles, but if there
have to be more cars, small is better than large."
((For a story on the battle for India's small car market, click on
[nBOM188852] ))
(Additional reporting by Kamil Zaheer)
((Editing by Ian Geoghegan; Reuters Messaging:
[EMAIL PROTECTED]; +91-11-478 1000))
Keywords: AUTOS INDIA/ENVIRONMENT . Keywords: AUTOS INDIA/ENVIRONMENT
. Keywords: AUTOS INDIA/ENVIRONMENT
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