and scooters are everywhere. They remind me of ants at a picnic--frenetically, chaotically, recklessly on the move, yet still maintaining some kind of strange order, heading toward some important, unseen object. And if your eyes don’t notice all the activity, your ears sure will. Low on power, big on noise, the 2-wheelers, with their little 100-200cc engines often straining under heavy loads, sound like a typical Saturday morning suburb in the U.S. where mowing your lawn is a weekend rite of passage. But maybe, almost imperceptibly, the world is starting to change.
I was recently in a taxi in Malaysia when the driver and I struck up a conversation. After all, we both knew that the crush of rush hour traffic would make our 10km trip from the hotel to my first appointment take, oh, about an eternity (an hour, actuality, but who’s counting?). In the midst of apologizing about all the traffic, he noted that the price of cars is coming down so fast in Malaysia that they’re not that much more expensive than those ubiquitous motorcycles and, given the choice, everyone would rather have a car.
His comment got me thinking about another article that I had read just that morning about Tata’s new Nano, the “People’s Car” designed and manufactured to cost 1 lakh (about $2,500) and slated for sale by year-end. It’s been hailed as the “next Model T Ford or Volkswagen Beetle”, claims to meet European emissions standards with a fuel economy matching the best hybrids, and will be introduced with unique financing arrangements to put it within reach of millions of new consumers. Tata has even proposed that the Nano might be boxed up and sent to budding Indian entrepreneurs to finish assembly and provide ongoing maintenance—Toyota, meet Ikea.
But this particular article was about how its new plant in an impoverished part of India, West Bengal, is under siege by opposition party politicos and farmers who claim that Tata didn’t pay enough for the fertile farmland where the new factory sits. In the midst of its attempt to create 21st century jobs in a region where the clock is stuck in neutral, Tata has unwittingly generated a clash between economic growth and property rights, politics and profits, a known old and an uncertain new.
And this maelstrom won’t stop at the borders of West Bengal. The very idea of a car for the masses (and I’m talking about tens, if not hundreds, of millions of emerging consumers here) has something to tickle or enrage just about everyone.
Environmentalists will complain about more pollution and the acceleration of global warming that comes from having more cars on the road. Other “eco-nistas” will argue that, when these new emissions-friendly cars replace old exhaust belching gas-guzzlers, CO2 levels in the atmosphere might actually drop. Here’s an equation you don’t see everyday: more cars=less global warming?
Consumer advocates will celebrate the fact that traffic fatalities will drop (almost 5x higher per capita in India than in the West, driven primarily by pedestrians getting hit trying to cross busy intersections and motorcycle crashes with 4-wheeled vehicles). Urban planners will tear their hair out trying to figure out how traffic will move at all.
They all better start getting their arguments ready because, whether the Nano itself takes off or not, the world is going to witness a radical drop in the average price of a car. As seems to be the trend for so many radical, cost-trending-to-zero social innovations, the Nano has prompted global car makers like General Motors to announce their own micro-cost car development efforts, a predictable dance in an industry where everyone follows “just in case” and thus creates a trend line (see “SUV”).
The introduction of successful innovations always creates more questions than answers in the short term. But history tells us that we always find a way to adapt. Not that that’s very comforting as I sit in endless Kuala Lumpur traffic, listening to the lawnmower serenade.
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