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Posts Tagged ‘Auto Expo

India’s mobility merchants

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Urban demand for automobiles and a government intent on road-building to feed that demand, never mind the alternatives and energy implications, are the subject of my recent article in the Economic & Political Weekly. It builds on a post I wrote here in January 2010.

Hoarding cluster in Mumbai, Maharashtra, to launch a new car

Hoarding cluster in Mumbai, Maharashtra, to launch a new car

The all-round optimism for a decade of automobile manufacturing requires an assurance that the infrastructure-building commitment and investment will not slacken. That assurance comes from a comprehensive ‘Master Plan’ prepared for the Ministry of Road Transport and Highways which advocates a sprawling ‘Indian National Expressway Network’. The final project report of this master plan was released by the ministry in November 2009, only two months before the 10th Auto Expo.

This master plan contains the rationale for and routes to comprise a vast expressway network of 18,600 kilometres, to be built in three phases each concluding in 2012, 2017 and 2022, and which proposes to employ both public-private partnership and annuity modes of financing and project execution. Moreover, the master plan seeks the creation of a National Expressway Authority of India to oversee this gigantic task, which will have extensive and over-riding powers and amongst whose important functions will be the expediting of land acquisition for the many sections.

Finally, the master plan has called for “innovative and feasible measures to improve the financial viability (including ploughing back of profit generated from real estate development, commercial development of wastelands etc)” to finance the 60 different sections of the proposed expressways network.

These two developments – the underwriting by the Government of India, through the Ministry of Road Transport and Highways and associated ministries and departments; and the growth of the automobile market in India to which commitments have been made by industry – taken together have presented us worrying new evidence concerning the kind of development we will see in urban and urbanising India over the next decade. There are a host of related concerns:

Autorickshaws in Vadodara, Gujarat

Autorickshaws in Vadodara, Gujarat

(1) On transport and public transit alone, the automobile-centric practices and policies embodied in the 10th Auto Expo, the Automotive Mission Plan and the national expressways network master plan push alternative modes of transportation (including the high-potential bus rapid transit systems, such as is now being introduced in Ahmedabad) into the background.

(2) From both government and from industry there is very little recognition of the possible scenarios that can govern the availability of fuels (certainly of fossil fuels until 2022) needed to fulfil the 10th Auto Expo’s consumerist theme of ‘Mobility For All’. This fundamental linkage should have hit home, for amidst announcements of new models came the regular bulletin from the Ministry of Commerce which stated that India’s crude oil imports rose 6.1% in November 2009, climbing to 10.48 million metric tons from 9.88 million tons a year earlier.

(3) India is already the fourth largest aggregate emitter of greenhouse gases worldwide and the country needs to be far more creative and visionary about creating a low-carbon future for its citizens. Industry and individual citizens will increasingly be called upon to be responsible for their manufacturing and consuming patterns relating to emissions and resource use. However, neither in the practice nor in policies government the automobile industries sector and the roads and highways part of infrastructure is there discussion about emissions equity in the country.

(4) Despite the efforts being made to integrate urban planning and transportation alternatives under the Jawaharlal Nehru National Urban Renewal Mission, the pro-automobile policies pay negligible attention to the inelastic demand created for cars in India, which are kept at a high pitch by the automobile (and financing) industry through extensive advertising. There are no significant measures, whether regulatory or persuasive, to temper this demand. Moreover, the huge direct demand for land (for use as expressways, highways, widened roads, etc), and the indirect impacts of change in land use that will impact agriculture most of all are externalised costs that both rural and urban public are already bearing, and which appear in no real costs analysis of a pro-automobile mobility choice.

Read the full article in the February 27, 2010, issue of the Economic & Political Weekly. The EPW pdf is here too.

India’s decade of wheeled deities

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In the period 2002-03 to 2008-09 the average annual growth rate in sales for the basic four categories of vehicles – commercial vehicles (lorries/trucks and buses), three-wheeled vehicles (that includes autorickshaws, which are short-distance transport in almost every Indian town and city), two-wheeled vehicles (that includes motorcycles, scooters and mopeds), and cars – has become the stuff of manufacturing legend.

India auto market (Reuters graphic)

India's vehicle market, Jan to Nov 2009, credit Reuters

Yearly sales growth of 17.46% for commercial vehicles, 13.51% for three-wheeled vehicles, 25.69% for cars, and 10.97% for two-wheeled vehicles have turned India into a market which has the potential to become a US$145 billion auto bazaar by 2016, say the Automotive Component Manufacturers Association (ACMA), the Confederation of Indian Industry (CII) and the Society of Indian Automobile Manufacturers (SIAM) who have jointly organised the expo.

These are the numbers that have caused every single major automaker from anywhere in the world to descend on New Delhi. Ten years ago, in 1999-2000, auto factories in India had made 574,000 cars – in 2008-09 the annual figure is 1,620,000. In ten years the number of commercial vehicles built has more than doubled, from 299,000 to 635,000. In ten years the number of two-wheelers built has more than doubled, from 3,778,000 to 8,394,000.

“Why India?” asks the promotional literature of the Auto Expo, and the organisers (supported by the Government of India and representing too the interests of the global auto giants) smugly provide the answers: “India is the second largest two-wheeler market in the world”, “Fourth largest commercial vehicle market in the world”, “Eleventh largest passenger car market in the world, and expected to be the seventh largest by 2016”

There are twin reasons for the rise of the Indian automobile bazaar. First, since 2006, globally the automobile industry has suffered what it plaintively calls “severe demand shock” on account of the economic slowdown and credit crunch in western markets (OECD + North America).

Auto sales, China vs USA, Reuters graphics

Auto sales, China vs USA, Reuters graphics

The drop in demand for 2008 and 2009 has been 38% in the US, 18% in Europe and 13% in Japan. In contrast the Indian passenger vehicle market maintained its demand during 2008-09 and is rising sharply for 2009-10. This is why most of the big names in the global automobile industry (GM, Toyota, Ford, Hyundai, Suzuki, Honda, Skoda, Volvo, Mercedes Benz, BMW, Volkswagen) are planning what industry analysts call “significant capacity build-up for the Indian markets”.

The triumphant notes being sounded by the automobile czars in New Delhi ignore entirely India’s worryingly uneven and imbalanced sectoral distribution of ‘growth’. What the comprador media calls “the India growth story” has only marginally touched agriculture, with evidence that over a prolonged period starting in the early 1990s, the per capita output of foodgrains was on the decline for the first time in the country’s post-Independence history, as economist C P Chandrasekhar has pointed out. Around 55 per cent of the increment in GDP over the last decade has come from the services sector, and just less than half of that contribution was due to an expansion of organised services, public administration and defence.

This gigantic exercise in furthering the cult of the car in India is underwritten by the Government of India. The industry has as its guidebook the ‘Automotive Mission Plan 2006-2016: A Mission for Development of Indian Automotive Industry’. This is a policy document from India’s Ministry of Heavy Industries and Public Enterprises which says, clearly and unambiguously in its ‘vision’ statement: “To emerge as the destination of choice in the world for design and manufacture of automobiles and auto components with output reaching a level of US$145 billion accounting for more than 10% of the GDP and providing additional employment to 25 million people by 2016.”

There’s more in the full article I wrote for Energy Bulletin here.