Car Boom in India

Sales for cars in India went up by as much as 61 percent in November 2009 compared to the same period last year, according to the Society of Indian Automobile Manufacturers. This is the highest increase the country has seen in the last five years. The largest growth was seen for the small car sector led by demand for Maruti Suzuki's hatchbacks and Tata Motors' Nano.

German carmakers want to be part of the boom, too. In March, Volkswagen opened a new factory in Pune. Volkswagen's Fabian Manneke explains: "We are currently tapping the Indian market -- and the figures speak for the Indian market. The entire market is seeing strong and steady growth, in part due to incentives the government is creating for the people. For example, strongly improved credit conditions that the customer can take advantage of to, say, go out and consume and buy cars. Volkswagen is also profiting from this development, not as much as the market leader Maruti Suzuki, but in the coming year we will also have the opportunity to participate even more in this growth with the introduction of our new Polo."

Congested roads

According to Darius Lam of Autocar Professional, India's premier automotive magazine, there are currently around 1.6 to 1.7 million new cars bought each year. These figures are expected to double by the year 2015. But there are already large congestion problems on Indian streets. Traffic at peak hours crawls between 12 to 15 kilometres per hour. And India is right at the beginning of motorization. So where is India intending to put all the extra cars? Darius Lam explains, "the government is building and improving the current road network and is adding new roads to the system as well. However, congestion in the urban areas remains very severe and is likely to get worse as the volume of cars increases but possibly for intercity and interstate travel the situation will get better because the highway network has been improved and is being improved now."

Car ownership raises environmental concerns, as vehicles are the most rapidly growing source of toxic air pollution in Indian cities today. In New Delhi, vehicles contribute nearly 72 per cent of the total air pollution.

Alternative growth paths still possible

But Anumita Roy Chowdhury of the Centre for Science and Environment in New Delhi also points out that India still has a chance to steer its traffic growth in the right direction: "The motorization level is still much lower in India. This also means that we have the chance to grow differently and we do not have to repeat the mistakes of the west even though car numbers are increasing, usage of public transportation is still very high, nearly 50 to 70 per cent of the daily commuting trips in Indian cities are on public transportation. And even in a city like Delhi, nearly a third of people still walk to work."

Environmentalists like Anumita Roy Chowdhury say that India will grow, but it will grow responsibly.

Author: Sarah Berning
Editor: Grahame Lucas