Even before a name has been selected for Tata’s highly ambitious small car, it is tipped to revolutionalise the road transportation in the country. Tata Motors have zealously guarded the vital details of the small car project for all these years. Mr Ratan Tata himself is reported to have scouted for an appropriate engine and technology for the car. Though rivals and experts had initially dismissed the Rs 1 lakh car as impossible, unviable or compromising on quality and emission standards, it is now clear that Tatas are set to prove skeptics wrong.The new car has already been described as ‘an engineering marvel’ and an extra-ordinary feat. The independent director on Tata Motors Board, Mr R A Mashelkar, is reported to have seen the proto-type and also driven the car recently. The well known scientist was impressed by the experience. According to him, the car would not only satisfy all the existing emission norms, but it goes beyond and confirms to international standards. Therefore, there should be no reason for worry on the question of pollution of environment.
The small car, besides being the cheapest car in the world, is expected to deliver highest mileage (25 kms) per liter of petrol. This would mean fuel-efficiency that is one-and-half times more than the existing small cars. Together, it would have tremendous impact on two-wheelers and aut-rikhshas in the country. Just to put things in a perspective, a three wheeler auto costs around Rs 1.3 to Rs 1.4 lakh on road. And its fuel efficiency is certainly not a plus point. Not just the private passenger transportation, even the public goods and passenger carriers will see some drastic changes.
So far the Tata’s most aggressive project has remained in the private domain; come January 10, it will be unveiled in an auto exhibition in New Delhi. It is bound to raise the aspirations of a large number of middle and even lower income groups in the country and perhaps in the entire third world. Presently the Indian car market is 1.4 million units strong; it is set take a quantum jump in the months to come. The nation has already emerged as the second biggest market for cars in the world. More than 100 new models are expected to be on display at the Auto Expo in Delhi. Though some of them are slated to enter the fray beyond 2008, at least 60 new cars are likely to hit the roads in 2008; that is a new model in less than a week for the entire year!
What will be the implications of this frenzied competition? Maruti Suzuki controls more than 50 per cent of the car market in the country; it is reported to be considering price cuts in its entry level models. Other leading players are also planning moves to meet emerging competition. It is imperative that the two and three wheeler segments also re-work their price strategies. India has already become a hub for manufacturing small cars for the world markets. This will further consolidate the position and bring enormous benefits of large scale production.
Of course, it will necessarily be pointed out that roads in our metros and urban centers can take no more vehicles and parking facilities are woefully inadequate. But then it is difficult to visualize best roads and good infrastructure in place before embarking upon expansion of auto sector!
It will also be argued that for a poor nation that is deficient in fuel, such grandiose plans are not warranted. However, alternative sources of energies, including different blends of petrol are being experimented with fair degree of success. There is no reason why a small car has to remain the exclusive privilege of the rich or the middle class. Even the argument of poor nation with huge pockets of poverty will not hold water. The best antidote for alleviation of poverty is faster economic growth.
Automobile industry is known to be a leading industry with tremendous potential for development of ancillary units and employment generation. The manufacturing sector is certain to receive a boost which will in turn help the economy grow faster. Most importantly, it will transform and upgrade thousands of families from two-wheeler to the comforts of a car.
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