The one lakh car

I think the car is a great idea. I am from California and if someone tried to take my god-given right to drive a car, I might even be inspired to go out and vote in the next election...I know what it means to have your first set of wheels...freedom and a sense of I don't know how to describe it...I obviously have too much time on my hands...but here is the thumbnail analysis of Tata's new venture. 

India has 1.2 billion people.

Let's say that of these people 100 million make at least 30,000 Rs./month

So you have a car costing 100,000 Rs.

Assume a 5 year loan at 10% and a 10,000 down payment

the person has expenses of :

8,000 in rent,

10,000 in food and incidentals,

3,000 in utilities,

leaving 9,000 in disposable income.

Running the numbers, the loan payment is going to be 2,000 Rs./month.

This is based on 25% of salary going to rent every month, 33% going to living expenses, 10% going to utilities (It is imaginable that the required income falls to around 25,000 Rs./month in some circumstances and then there is the second car syndrome).

India is completely unprepared for the one lakh car and here is why...Today only 8 of 1000 people have cars—about 9.6 million cars, but there are 65 million scooters/motorcycles who could potentially trade up. It isn't unrealistic that the demand will run more than 90 million—let's say that all 65 million people who currently have motorcycles or scooters trade up to cars over the next 5 years...and we assume most of these people are going to live in the larger cities (I have heard rumors that Chennai is predicted to have 3 million vehicles in the city already)—worse case scenario...If we distribute the 65 million cars over  India with Bombay and New Delhi getting 15 million each and Chennai, Bangalore, Hyderabad and Calcutta splitting 20 million... 

Chennai almost doubles the number of vehicles to 5-8 million (let's say 5 million conservatively as the number of rickshaws and scooters will fall) and doesn't have time to improve the size or number of the roads. I don't even want to think of Bombay and New Delhi...and 65 million cars will emit 130 million tonnes of CO2e (if all the cars are diesel which will emit about 2.1 tonnes compared to 3 tonnes per vehicle for gasoline). Then you have the contributions of NOx and Particulate Matter, both known carcinogens and attributed to increasing the incidence of emphysema, asthma and bronchitis...more health problems and higher social costs.

Plus every Indian city becomes one big parking lot...lowering productivity, increasing commute times...

Of course there are some alternatives at least where pollution is concerned, complementary policies to alleviate some of the impact environmentally:

Bio-Fuels/Mixed Diesel

                   or

 PM filters with Low sulfur Diesel

There is the possibility of using bio-fuels or mixed diesel formulas, which would reduce both the CO2e and NOx/PM output of these cars by about 10% or a water-based diesel (proprietary mix called PuriNOx which reduces these pollutants by up to 40%). But both of these fuel types add to the cost. In the US the cost is $0.20-0.60 per gallon and they are relatively difficult to find as they are not mainstream yet (CDM project anyone? Chennai how about a switch to bio-fuels in all city vehicles?). The key to this solution is India acting now...policy encouraging the planting of wasteland with jatropha AND a policy ensuring that farmers don't switch to jatropha en masse causing a food shortage. 

Then there are the Diesel Particulate Filters, but this is a retrofit technology and costs about $5000-10,000 per engine (good-bye one lakh car), yet these reduce PM by almost 90% and if used with only low sulfur diesel the benefits are phenomenal (CDM project anyone?). 

Luckily, production will not be able to meet this demand...20 million cars per year is unachievable (I hope). But even if the number is only 2 million (from Tata, Ford, Honda, Nissan, Toyota, Renault and the others...) on top of the 1.3 million cars currently sold a year in India, we are looking at about 20 million cars by 2012 (The article claims a total of 300 million car owners by 2020 but this would require double-digit growth a year starting in 2008).

Whatever happened to public transportation? I know that public transportation in India needs to be improved (okay understatement) and yes the rickshaw drivers are little better than thieves (at least in Chennai where the fares become more arbitrary the more times you ask for a price). But how about investment in Public Transportation? How about Private/Public Transportation? Clean efficient trains run on electricity, clean buses that don't have people hanging out the windows and doors...maybe a monorail or subway. 

India has the opportunity to learn from all the mistakes the West has already made—and foreign companies would kill to sell this technology here. Indian companies would benefit from technological partnerships and the competition. The health benefits alone would likely pay the extra costs...But unfortunately this will probably not be the course India takes...until the traffic is so bad that people demand change.