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Small Car Boom Spells Urban Doom

Posted on Saturday, Feb 10th 2007

by Satish Dey, Guest Author

India is basking in the sunshine of its robust economic growth and the inevitable consumerism it has spurred by way of higher spending and improved lifestyles for its citizens. A car — the ubiquitous status symbol delineating the rich from the poor — is expectedly much in demand. The nation’s image as one afflicted with widespread poverty has taken a backseat after 1.3 million automobiles were manufactured in 2006. In my previous posts ‘Small Is Beautiful‘ followed by ‘Small Cars Make Big News‘, I hinted at small cars becoming the cynosure of automobile manufacturers. But is it really good news?

The year 2007 may see the launch of over 40 new models, many in the small car segment. The scenario is becoming all the more exciting with international giants Honda, Toyota, GM and Fiat eyeing small car markets and planning huge investments in India. Their combined committed investment in the Indian automotive sector is reported to be Rs 60,000 crores (more than $13 billion) over the next four years.

If this is not enough to celebrate, then Goldman Sach’s forecast that India will have the largest population of automobiles by the year 2050 definitely calls for uncorking some Champagne.

But wait! We should also take into account what is lurking in the darkness. Indian cities and towns are notorious for endemic traffic jams caused by narrow roads with fast-moving automobiles vying with slow-moving handcarts, three-wheelers and bicycles for right of way. The air and sound pollution far exceed prescribed safety limits. The number of road accidents in India is also high. So if more and more small cars are made, their highly competitive market may benefit consumers who will also have the luxury to choose from a wide range of models at affordable prices. But it will spell doom for the millions living in cities.

What’s more, car density will increase severalfolds from the current measly four cars per 1,000 people. The boom in the automotive sector will also generate jobs for a few thousand people. However, the flip side is too catastrophic to celebrate India’s boom of small cars.

Let the government first ensure that there will not be environmental damage and that and more cars are not going to bring more problems. Air pollution. Sound Pollution. Energy crisis. Traffic Jams.

Need I say more?

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I couldn’t agree more with Sramana. There comes a point where greed & status symbol of owning more and more cars, etc simply pose a threat to the environment as well as making our lives even more hectic. Automobile companies should perhaps consider privatizing the roads, bridges, & highways before they unleash these small cars into these polluted & congested streets. Govt. won’t be doing anything anytime soon to address this issue. Infrastructure improvement is highest on India’s priority list for the real growth to take place.

G Baliga Friday, August 3, 2007 at 10:07 AM PT

[…] The only problem I have with Ratan Tata’s passions is that small car project. […]

The Last Rajah - Sramana Mitra on Strategy Saturday, August 4, 2007 at 3:22 AM PT

The car fever is gripping almost all Indians today. People have started seeing it as a status symbol rather than a means of commuting; I guess everybody will have to work from home or have weekly one day of seeing the coworker the rate at which the number of cars is getting added to the existing roads.
It takes 2 hrs to get to work in cities like Bangalore, Hyderabad or Pune. Imagine the roads with the one lakh rupee car on the street, its going to be a mad show.

Roshan Thursday, August 30, 2007 at 2:30 PM PT

Obviously, the solution is to have a GREAT public transport system…that runs on time…

Seems unlikely to happen in Pune at least for next 5 years…

Sumedh Monday, October 15, 2007 at 8:45 AM PT

India needs to follow the European model wherein public transport is given priority over private. Unfortunately, we have picked up the US model which requires pre-reqs like planend cities, superb road network, traffic sense none of which exist in India.

The problem is how will public transport scale in an urban setup in India. For eg: B’lore is outta control.

If growth continues to skew in India towards southern/ western cities then a nightmare awaits for all urbanites.

Harish Tuesday, October 16, 2007 at 9:30 PM PT


on one hand i applaud the creativity…

however, this results in increased use of energy, emissions, congestions, impacts land use, sprawl…all counter to sustainability and re-thinking the new urban design

dave chen Tuesday, January 15, 2008 at 10:55 AM PT

[…] Small Car Boom Spells Urban Doom by Satish […]

Tata’s Disastrous New Move - Sramana Mitra on Strategy Tuesday, January 15, 2008 at 11:01 AM PT

Agreed. The answer maybe in privatising infrastructure developments, however, developing a robust Public Transport system is the key to Urban Growth. Consider the Metro network developed in Delhi, underground in London, Subway in Paris and New York. Also consider the levy of congestion charge during weekdays in Central London, as taking the car to the city (in terms of traffic, parking cost and congestion charge) is much more difficult than taking an easy underground train to the central zone. Are the leaders considering the various infrastructural solutions?

Aashish Wednesday, January 16, 2008 at 5:33 AM PT

Small a car is need for india, we need to look beyond Indian cities, small town and villages will certainly benefit.
why don’t we take it from other perspective?
Small cars will augment growth for exhaust and filter industries and that may take us toward EURO-4.
Offcourse traffic Jam will be a problem but we need to remember India is a democratic country, public will punish the system if civic body is not ready with better infrastructure. India is slow but certain 🙂

subhankar Friday, May 16, 2008 at 12:36 PM PT