Small Cars - Big Dilemmas

The farmers of Singur in West Bengal are desperate to save their land from transforming into an assembly line for cars of Tata Motors priced at one lakh rupees (US$2222). While the state’s left front government is eager to oblige with cheap land deal, the Union government is ready with more tax cuts to shorten the fuse and set off explosion in car sales. In promising unconditional support our regulators forgot to ask about the product itself, -- an unusually cheap micro car – whose impact will reverberate much beyond Singur.

Our regulators do not ask uneasy questions. It is not necessary for them to know how ultra low cost cars will explode car sales in cities and towns, when at 8 per cent GDP growth, buying power is getting bullish by the day. They do not want to weigh up the impact of easy ownership and usage of cars on pollution and congestion even though air pollution has crossed critical levels in more than half of the 90 cities under surveillance. Our GDP is not adjusted to reflect the congestion and public health cost of motorisation which in other countries have shown to be significantly high. Billion cars for billion people is the new deal – a killer pact.

No one has authentic information about the micro car except what the media is reporting with a few occasional statements from the car merchants. The jigsaw when pieced together shows a 30 horse power engine, perhaps in the range of 700 cc engine displacement, capable of carrying four to five people. Market speculates - can it be on diesel? Tata already has a commercial Ace pick up model with IDI diesel engine in the size range of 700 cc! Even a hint of micro diesel car should put all on the alert and prevent it.

Indian car industry argues that availability of local engineering skills and material, indigenous manufacturing base are an opportunity to develop affordable cars that also meet emissions standards. If Indian industry does not do this the Chinese will. So build volumes at the lower end, at lesser margin and still remain profitable, is the industry axiom.

But the regulators have the responsibility to ask and people the right to know, where to place these micro cars in the overall paradigm shift in technology and mobility. The sales of these cars will gather momentum and scale and begin to dominate pollution inventory in our cities very soon.

The concern is not the size. Small cars and downsizing have begun to find favour for fuel efficiency in an increasingly energy insecure world, squirming under warming effect of heat trapping gases. The root of scepticism is the abnormally low price and what it can afford in terms of performance, durability and safety. And the potential effect of the cheap cars on congestion and pollution. Slated to hit the market in 2008, these cars will jam cities much before Euro IV standards are in place. Their rank may swell with more players planning models priced somewhere between a high end two-wheeler and the current entry level car of 800 cc to capitalise on the emerging market.

Energy efficient micro cars ar enot unusual and have seen niche growth in Europe and Japan. The Euro IV 698 cc Smart cars for instance come in snazzy style with three-cylinder turbo engine, electronic multipoint fuel injection, electronic accelerator, three-way catalytic converter, and other fancy features. But technical features of low cost Indian micro cars are not known though small compact petrol models in 800 to 1200 cc range are expected to see improved MPFI fuel delivery, advanced closed loop system with three way catalytic converter, electronically controlled EGR in some among others. Diesel compact cars upto 1500 cc will move to CRDI along with other improved features. But technology shifts and costs have added another dimension to the debate.

If the car industry is racing to the bottom to compete on costs, regulators will have to hold it responsible and enforce strong in-use compliance measures so that emissions remain low through out vehicles’ life and not just when it is new. But no one dares to demand cutting edge regulations for in-use compliance management that can push industry to avoid serious compromises while addressing tradeoffs between cost and quality. This is the forbidden area in policy discussions. Emissions warranty with recall is unheard of in India. In-use measures are dismally minimal. Also remember the way industry resisted legal mandate for on-board diagnostic control that self diagnose problems in emissions control system. OBD system will come in Indian Euro IV models only to generate data – its enforcement will be put off until 2013!

Desperate strategies to cut costs and build new customer base is easy in India because public policy does not target to recover the full costs of owning and using a car. The cost of using up urban space for parking and roads, cost of pollution and health damage, social impacts are not reflected in the taxes and road pricing. Despite enjoying hidden subsidy, the car industry is continuously externalising the true costs of its products while minimising tax contribution. If fiscal brakes are not applied to check the car boom micro cars will only complicate the technology and mobility transition. The uniquely placed micro cars when mass produced will erode the fuel economy advantage of two-wheeler fleet, and counteract the energy and pollution benefits of bus transport planned under the Urban Renewable Mission.

Imagine the aftermath in Left front’s very own Kolkata in the catchment of the Singur project. There is no road space left for more cars except where the tram lines are being ripped off, and rickshaws are being pulled out. Alarming level of PM 2.5, heavy with diesel PM (share rising upto 61 percent) is snuffing life out of the city. The Left Front government, marching to the market, cannot even implement its own decision to cut vehicular pollution let alone acknowledge the pollution dilemmas of industrial growth. If ignored, pollution can adversely affect investment climate. Take a leaf from Hong Kong’s experience where a growing number of foreign executives and companies are leaving the city despite having air quality much cleaner than Kolkata.

Micro cars will need micro management of pollution and mobility in cities. If neglected air pollution and congestion can cost any city its competitive edge and destroy it.

Anumita Roychowdhury
Right To Clean Air Campaign