How Green is My Low-Cost Car? India Revs Up Debate
Date: 20-Jun-08
Country: INDIA
Author: Rina Chandran
With a price tag of about US$2,500, the Nano will cost about half the price of the cheapest car currently on the market, easily affordable for Kumari, who works as a software developer. "I can drop my kid at school, go to work and go shopping more comfortably," said Kumari, who now shares a car with her husband.
But some environmentalists are dreading the prospect of hundreds of thousands of low-cost cars hitting polluted and over-crowded roads around the world in the next few years.
"In the current policy and regulatory framework, the low-cost cars will be disastrous," said Anumita Roychowdhury, associate director of the Centre for Science and Environment in New Delhi.
Car makers, warily eyeing sliding sales in developed markets such as the United States and Europe, disagree.
They argue the small, fuel-efficient vehicles are a greener option than gas-guzzling SUVs and larger cars as oil soars above US$130 a barrel and as consumers in emerging economies such as China, India and Russia get behind the wheel in ever increasing numbers.
Tata Motors, which unveiled the snub-nosed Nano to a rousing reception in January, says the world's cheapest car meets the strictest environmental criteria, and its lean design delivers high fuel-efficiency of about 20 km/litre of petrol.
The car, with a dealer price of 100,000 rupees (US$2,330), will have tailpipe emissions well within Indian requirements. It is less polluting than motorbikes and scooters, Tata Motors says on the Nano's website, http://tatanano.inservices.tatamotors.com/tatamotors/
"The concern is really about the sheer numbers," said Mohit Arora, managing director for India at JD Power Asia Pacific.
"They may be more fuel-efficient than bigger cars, but they will still emit carbon and NOx (nitrogen oxide) ... and that's a valid concern."
The numbers are staggering.
Still only 8 in 1,000 people in India own a passenger car. In China, it's about 20 but in Japan and the United States, it's at least 450 cars per 1,000 people.
Every day, about 17,000 private vehicles are being added to China's already congested roads, while Indian passenger vehicle sales are expected to rise by almost 50 percent over the next three years.
Such explosive growth will demand a rethink from auto makers.
"Over the next 5-10 years, technology, moral pressure, regulatory pressure and high oil prices will push even premium car makers into making changes to their engines," said Steve Howard, chief executive of The Climate Group in Britain.
India is at the forefront of the move to low-cost cars, and is doing its best to promote their green credentials.
Indian motorbike maker Bajaj Auto says its US$2,500 car, which it is building with Renault and Nissan Motor, will aim at a fuel-efficiency of 30 km/litre, or twice an average small car, and carbon dioxide emissions of 100 gm/km.
"That would make it far superior to cars even in the European Union, which wants to bring down carbon emissions to 120 grams per km (from 2012), and the 180 gm/km that India is fighting to defend," said Managing Director Rajiv Bajaj.
The Bajaj venture will have an initial capacity of 400,000 units, while Tata expects eventual demand of 1 million Nanos.
NEW REALITY
Rival car makers including Fiat, General Motors, Ford Motor, Hyundai and Toyota Motor have all expressed interest in building a small car that is affordable to more middle-class consumers in emerging markets.
"Growth is in the emerging markets, and the bulk of demand there is for small cars because people are much more sensitive to fuel prices," said JD Power's Arora.
But not everyone is sold on the small and super-cheap car. Honda Motor Co, the world's biggest motorcycle maker, is notably cool on the likes of the Nano.
"I don't see the draw of that kind of car," CEO Takeo Fukui told reporters recently in Tokyo. "In India, the roads are so congested that it'