I recommend you read part I of this post here:
Some publications that talked about the TATA Nano since I last posted on it:
I usually avoid talking about reaction to news, and I wanted to cover the car rental market and the used car market in India. However, the reaction to the TATA Nano provides irresistible grist for the mill. So here goes.
My friend V. (who I respect a lot for staying true to our computer science roots, unlike me who sold out to the management brigade), made some interesting points about the TATA Nano:
1. A cheap car does not mean you have the roads and infrastructure to drive it on.
2. Fuel is super expensive. According to his calculations, driving 20 miles/ 30 KM/ day would cost about a third of the car's price in a year.
3. The launch of the car will lead to increased pollution, traffic congestion, and fuel prices.
These are all great points, and I would start looking at them in the reverse order.
On point 3: Why is TATA Nano being singled out and slapped with these objections? Some more drivers (TATA would certainly hope that a lot of drivers) would join the global brotherhood of high-falutin' gas guzzlers to enjoy the priviledge of driving, and some would say, enjoy the right of getting from Point A to Point B. Only, the procession of Newbies in their shiny new Nanos would be doing it at 50 MPG.
Perhaps the though of achieving 50 MPG so easily is giving the hybrid hippies (before the greens come after me, I know someone who claimed she was a hippie for owning a Prius)- who've probably pawned off their Jordan XX3s to go green- sleepless nights.
However, I do accept the reality that driving conditions would change, for a start, in India. That family of 4 that would make you suddenly brake by appearing in front of you out of nowhere? They would now suddenly appear in front of you out of nowhere in a TATA Nano. Only, given the Nano's limitations, it would not be so sudden anymore. So congratulations, you, driving that more expensive car, will now find more reason to exercise the horn.
As an added benefit, you will feel happier that you don't have to worry about that family of 4, riding a scooter with the baby hanging loose by the sari's "dupatta" at the back ,while you drive.
Now, coming to point 2: fuel being super expensive. Would you trade in your more expensive car for the Nano? I hope you make the smart move and dump the Fords, Suzukis and the Hondas of the world, given that high gas prices are only going to get higher. Oil is $100/ barrel and some are betting it will reach $200/ barrel by end of 2008. A couple of lakhs in rupees/ a few grand in dollars saved in upfront car cost will fuel your current lifestyle for a few years.
Let's expand that to TCO (Total Cost of Ownership). Someone joked that in a couple of years, the engine might have to be replaced by bullocks. Well, more power to bullocks then! In a few years, even used cars would be too difficult to fix in the owners' backyards. That should be fodder for thought right there.
As for point 1, infrastructure: Look at how crazy traffic is in Bombay. The price of the car is really not going to be the key driver in terms of reaching an equilibrium on the Quantity of cars on Bombay streets (until we hit a tipping point, of course, and given Bombayites bottomless ability to endure, the tipping point will take some time coming, I assure you). The city that contributes over a quarter of the country's taxes has horrid infrastructure. Pointing to the quantity of cars on Bombay is really a misdirection for a lack of planning and infrastructure.
Before I wrap up, I would like to quote an incredibly funny take on this by my friend Sameer Gaunekar. This has Bombay and Bollywood references, and if you have seen "Thank you for smoking", the parallel is the senator trying to remove references to smoking in old movies:
Remember the motorbikes with the side carriers; with the advent of Nanos they surely will disappear, so if Ram Gopal Varma or even if the Sippy’s ever had to direct a re-make of Sholay then the “Yeh Dosti” song would be shot in a Nano instead of a motorbike with a side carrier….
Borrowing Bono's phrase, Sameer's brilliant. :-)
Wrapping up: The reaction to this car from some quarters seems to be similar to the reaction to Negroponte's One Laptop per Child. The issues raised are those we have been grappling with since the first oil crisis in the 1970s, an will continue to work to resolve.
If this car makes people put money where their mouth is (instead of their foot), and do something about transport- decent public transport/ improved roads/ alternative energy sources/ whatever - then its more than served its purpose of being the "People's car". :-) What this "Freedom of Movement" does to India and its economy down the line is something I would like to see.
What do you think, my friend?