April 21, 2009

Low Cost Car Soon To Join Gridlock on World Streets

The world’s cheapest automobile, known as the Tata Nano, debuted at the Delhi auto show in late March with the promise of bringing greater mobility independence to scores of families. Millions of new vehicles are expected to compete for space on the already congested road network in India. Sustainable transport advocates are watching closely to see the full scale effects from the introduction of the Nano.

Not since the Volkswagen Beetle or the Ford Thunderbird has a car manufacturer unveiled such an ambitious vision for an economy car.  Promoted as the “people’s car,” the Nano will make automobile ownership financially attainable for the burgeoning Indian middle class. India’s middle class is currently equal to the population size of the entire United States, amounting to nearly 300 million people and growing at a rate of 1.5% each year.

The compactness of the Nano, 9 feet long by 5 feet wide, reportedly allows it to squeeze through traffic full of pedestrians, minibuses, cows, camels, rickshaws and other road users. It can reach a speed of 65mph, but will likely go at a slower average speed given projected traffic congestion.

The Nano is able to travel 50 miles per gallon and meets emission standards in India and Europe. Despite its fuel efficiency, environmentalists believe the increase in vehicle miles traveled will counteract any fuel use innovations.

In anticipation of the automotive boom, new roads are being built in India’s main cities. The new vehicles will also need to be parked somewhere. Children’s playgrounds, swimming pools and gardens are already being converted into parking lots to accommodate the estimated spike in private vehicles ownership and use. Public space will continue to be eroded if parking is not properly managed. At a rate of 1 million new Nanos rolled out each year, the world will need to keep apace by allocating the equivalent of approximately 1,000 football fields of parking space per year.

Tata Motors, manufacturer of the Nano, initially plans to produce 250,000 units with hopes of eventually selling 1 million each year. The first 100,000 vehicles will be sold by lottery. Demand for the Nano is already high and expected to grow, especially in other regions of the world such as Southeast Asia, Latin America and Africa.

The price of the Nano has some worried that it will be an economically competitive alternative to mass transit.  The most basic version of the Nano costs about $2,500, including taxes. Air-conditioning, radio, airbag, passenger-side mirror and other frills can be added at an extra cost. The competitive price is hard to beat, especially at a time when auto industries in Stuttgart, Detroit and South Africa are receiving government bailouts to avoid bankruptcy.

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