The little car with truly grand ambitions

Much of India's population, which is expected to grow to 1.5 billion by 2030, can now realise their dream of buying their own car.

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MUMBAI // One morning, a few years ago, caught up in a Mumbai traffic snarl, Ratan Tata noticed from his car window an old puttering scooter hauling a family of four. That is not an unusual sight on Indian roads, but that family's plight caught this business tycoon's imagination. Amid the honking traffic, Mr Tata had an epiphany: the family represented a vast social need for an affordable car for millions of Indians for whom a four-wheel vehicle was far out of reach. Yesterday, Tata Motors, a car manufacturing giant owned by Mr Tata, brought that vision into fruition. It rolled out the Tata Nano, a bubble-shaped car, the world's cheapest, selling at just 100,000 rupees (Dh7,261). "We hope one day that this will usher a new form of transport," Mr Tata said at a news conference before the launch in Mumbai's Parsee Gymkhana Grounds. "It was never conceived as being the cheapest car, but as a car that would give Indians [the ability] to own a car that had not been in their reach." The Nano, experts say, will herald a motoring revolution in India. The family-on-a-scooter phenomenon might disappear from India roads, as people with two-wheelers upgrade to cars. And also, India's vast rural populace, for whom owning a car is a major aspiration, might become first-time buyers. The basic version of the Nano can be purchased at a modest down payment of 2,999 rupees, with monthly instalments of 1,752 rupees financed over seven years - well within the reach of the average worker in India, where the per capita income is about US$800 (Dh2900). The Nano, with deliveries commencing in July, is bound to accelerate India's motorisation rate. According to Crisil, a Mumbai-based credit-rating agency, eight million Indians currently own cars. Another 18 million, largely from India's burgeoning middle-class, have the means to buy one. However, the Nano could increase that pool of potential auto owners to 30 million. But the prospect of a flood of additional cars on the roads terrifies city planners and environmentalists. India is urbanising at blinding speed, but across many Indian towns and cities, road infrastructure is crumbling. The Nano is expected to add a lot more pressure on Indian roads, often clogged to capacity. Each year Indian vehicles spew out 219 million tonnes of carbon dioxide, the greenhouse gas most responsible for global warming. According to the Asian Development Bank, by 2035 India's carbon dioxide emissions could soar to 1.5 billion tonnes, largely because of additional cars such as the Nano. "Cheap motorisation is not about cheap cars," said Anumita Roychowdhury, the associate director at the New Delhi-based Centre for Science and Environment (CSE). "It's all about an efficient public transport." In New Delhi, India's capital, Ms Roychowdhury points out there are 4.5 million vehicles, and the city adds 1,100 new cars each day. Currently, cars in New Delhi, according to the CSE's research, take up 75 per cent of road space and meet just 20 per cent of citizen's commuting needs.

"We are not against the Tata Nano, per se," she said. "We want cities to be built on public transport." India's population is projected to grow to 1.5bn people by 2030, of which 40 per cent - or 600m - are forecast to be living in towns and cities. By 2030 India is expected to have 70 cars per 1,000 people, up from the current rate of eight per 1,000 people. But even that rise is far lower than in many developed countries. Traffic congestion is not so much about the number of cars as much as it is about efficiently managing traffic. Across urban areas, buses are the major mode of transportation, carrying more than 90 per cent of public transport passengers. But considering they are often overcrowded, they are losing appeal. Public transport passengers are increasingly switching to private motorcycles, or cars, if they can afford them. In the long run, Ms Roychowdhury said, building an efficient public transport system for a growing population, was a foolproof way of "reducing greenhouse gas emissions, local air pollution, and traffic congestion". Tata's officials insist they are not sacrificing quality and safety standards to meet a low price tag, and the Nano will pollute even less than motorcycles. As for traffic congestion, they said, the real potential buyers of the Nano were far from cities in rural India where road infrastructure is far from being congested. "Personal transport there is growing and at a nascent stage," Mr Tata said. [e-mail]