One Lakh ($2500) Car: Curse or a Boon ?

Tata Motor’s Nano for 1 lakh INR ($2500) is targeted towards the growing middle class population which cannot afford a four wheeler at the current prices. Maruti-Suzuki has also announced their plan for developing small cars at the comparable prices. I was wondering in case this disruptive technology is successful in India. Will this really be a boon (uplift the standard of living) or a curse?

1. The current road conditions in India are really bad. There are no ring roads to travel around the city at faster pace bypassing the city traffic. It is difficult to drive a two wheeler in a booming city like Pune and in such scenario a sudden influx of thousands of cars will worsen the situation. The commercial success of these low cost cars will pressurize the existing infrastructure.
2. The second problem is of pollution due to the emission from these cars. Strict pollution norms must be imposed to tackle the emission problem.
3. And what about the ever soaring gas prices? Consumer may think more about the gas price than the actual price of the car.
4. Central parts (similar to a downtown) of the cities like Pune do not have adequate parking facilities. The influx of thousands of cars will add to the existing parking nuisance.
The industry should concentrate their efforts on research and development of low cost ‘hybrid’ cars instead of just low-cost cars. In the long term it will be better and profitable strategy. The Government should work towards building better mass transport systems like Delhi metro. Such projects should be implemented in other booming cities like Pune and Bangalore.
On the other hand, commercial success of the Indian cars in the foreign markets can prove a boon to the economy. India Inc will be more diversified and stable than dependent upon services and the software sector.