Laissez Faire
Government sits back, carmakers make hay
No one knows where to place the ultra-low-cost cars in the overall paradigm shift in technology in India. Small cars and downsizing have begun to find favour to achieve greater fuel efficiency in a world increasingly threatened by energy insecurity and global warming, because they are more energy-efficient than oil-guzzling suvs. The main concern about the new small car is abnormally low prices linked to what is on offer in terms of emissions performance, durability and safety.
The Tata car will jam cities before Euro iv standards are enforced in 2010. It will thus meet abysmally backward Euro ii standards in smaller cities that are 10 years behind Europe and Euro iii norms in 11 major cities that lag by five years.Should Tata Motors have waited for Euro iv to kick in? "Why Euro iv, someone may even ask for Euro v. We will meet the standards we have to meet,' was md Ravi Kant's reaction, knowing the government is sitting on more stringent standards.
While the automobile industry prospers, much of urban and suburban India is getting more polluted. Central Pollution Control Board data show that in more than half of the 90 cities it monitors, particulate levels (particles of 10 micron that can kill at very low concentration) are hitting the critical button. Nearly 13 cities have begun to show an upward movement in no2 concentration, largely driven by vehicular pollution. Cities close to Singur already have a higher nox profile than most cities. Howrah, a couple of hours from Singur, and Kolkata are among the nox and particulate matter hotspots in the country. Other small cities are showing up on the list of most polluted ones in the country.
Yet the government has not fixed emissions standards to bring all cities within the fold of cleaner standards. Industry observers claim that moving to Euro iv standards will create price pressures. Industry might find it easy to promise rock-bottom prices with good cost management and efficiencies of scale and may even offer a variety of features at reduced costs, but low-cost cars will prevent an r& d challenge. For instance, engines and exhaust systems, along with emissions control components, are taken to constitute about 30-35 per cent of the total cost of a car. I V Rao, technical director of Maruti Udyog, points out that there is little scope to cut costs in these areas since industry has to meet regulations.
The increasing popularity of low-cost cars has created extreme pressures for innovation to meet high and durable efficiency levels at lower and lower costs. This is particularly challenging for emissions-control components manufacturers. Higher emissions control standards imply more precious metal loading in cat converters to clean up exhaust, for instance. This has to be matched with other improvements to reduce emissions.
Strong regulatory checks on performance, safety and durability that are necessary to offset adverse impacts are still weak (see box: Not very exacting). Regulators will, however, have to enforce strong compliance measures so that emissions stay low through a vehicle's life and not just when it is new. Small may be efficient, it must also be clean.
Big threat to counter
The other bigger worry is the advent of cheap diesel cars. Tata Motors is already producing a 700cc commercial pick-up truck and is in the process of upgrading its engine system through collaborations. Cheap cars on low-cost poor quality fuel can be a fatal attraction for low- to middle-income groups. Even without low-cost cars projections show that by 2010, diesel cars can be half of total car sales.
On August 23, 2007, the Delhi High Court raised questions on the expansion of the diesel car fleet in Delhi. It was responding to submissions from the Delhi transport department that on a per passenger-kilometre basis, 3-13 diesel cars spew particulate emissions equal to a diesel bus. This is negating the benefits of switching public transport to cng. The current norms allow diesel cars to emit very high levels of particulate matter, and nearly three times more nox compared to petrol cars. Diesel emissions are several times more toxic.
Without clean diesel and without narrowing the price difference between diesel and petrol, the use of diesel in the ultra-low-cost segment must not be allowed. Only when new diesel vehicles are fitted with advanced emissions control technologies, especially traps, and run on diesel with less than 10 parts per million sulphur fuels, will toxicity levels of the emissions come close to the level of petrol emissions.
Not at the cutting edge, no one seems to care
How safe are low-cost cars? Industry maintains they meet required standards. But key safety standards are not complete. Some, including the full frontal crash test, air bags that protect the rider from impact and anti-lock braking systems (abs), are not mandatory and offered only in high-end cars. Currently, the Automotive Research Association of India (arai), a Pune-based certification agency, checks components that influence safety levels. These include brake systems, door latches, fuel tanks, speedometers, speed limiters, reflex reflectors, safety glass, safety belts, side door crush resistance, steering wheel impact protection, among others. But full-crash tests that determine how a car will crumple in a collision, minimising the impact on the riders, is still not mandatory. Tata Motors claims it has adequate in-house facilities for safety checks that meet international standards. But key tests are not backed by mandatory certification.
In early September 2007, the Union ministry of shipping, road transport, and highways finalised the draft automotive industry standards for frontal crash, frontal, side and offset impact crash safety tests. To be enforced in 2009-10, these will increase prices. The majority of small cars will have to be upgraded to meet standards. Impact absorbing features like air bags along with abs can increase prices by Rs 40,000-50,000. According to sources in arai, many entry-level cars will need redesign to integrate changes in safety regulations. This could hit makers of small cars.
Unfortunately, Indian buyers are not informed of safety status of cars as in Europe. Add the fact that consumer awareness is low and government not proactive and what you get is a mix that allows industry to get away with specious reasoning
Related Content
- Efficiency and equity in urban flood management policies: a systematic urban economics exploration
- Empire meets globalisation - Explaining historical patterns of inequity in South Asia
- EU defends groundwater purity law
- The victims of vanity
- Coal-based "merchant" power plants- A threat to ecology and livelihoods
- Green is turning into grey on the Ridge