Cute, $2500 PeoplesCar Could Be Environmental Disaster

The country's economic boom has spurred a car-buying frenzy, and India is set to become the world's largest auto market within a few decades -- reaching as many as 600 million units by 2050. That's more than twice as many cars as are currently registered in the United States.

Published: 13-Jan-2008

most hotly anticipated auto show of 2008 isn't the one set to begin in Detroit next week. It's the New Delhi Auto Expo, which opened in India three days ago and managed to beat Detroit to the punch by a week -- and $2,500.

That's the sticker price of the most eagerly awaited new car in decades: the Indian-made "people's car," dubbed the Nano. It's the brainchild of Ratan Tata, scion of the massive Indian conglomerate known as the Tata Group. He had long dreamed of giving middle-class Indian families a safer alternative to piling mom, dad and the kids onto the only motorized transportation they could afford: a motorcycle. True, the car doesn't meet U.S. safety standards. Still, by putting distribution in the hands of its dealers, taking advantage of cheap Indian labor and using lower-cost materials, Tata Motors has driven the price of a car down to levels never seen before.

This is good news for the millions of people in the developing world who never imagined that they could own their own car. But it's a problem for the rest of us.

It's a problem for Detroit, which is racing to enter India's booming small-car market but will now have to completely revolutionize its production and distribution to compete. It's a problem for America's beleaguered auto workers, who will become even more expendable as Detroit moves its manufacturing efforts to India and other Asian countries. And it's a potentially gigantic problem for the environment. India's urban roadways are already choked with traffic, and the air quality of its major cities is ghastly. If millions of Indians and Chinese get to have their own cars, the planet is doomed. Suddenly, the cute little Nano starts to look a lot less winning.

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The Tata car could 'jam cities' and raise pollution, NGO Centre for Science and Environment warned, noting as congestion builds up and vehicles slow down, emissions increase up to five times.

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