Thursday, January 10, 2008

I think it's time to pay attention to Tata Motors

Recently Tata Motors has been in the news a lot. First, the Indian company bought Jaguar and Land Rover from Ford. Then the company announced plans to sell a $2,500 car called the "Nano ." (There is now stiff competition in the low cost Indian car market as Bajaj just introduced a $3,000 car built with the help of Renault.) But now Tata, who may want a PR firm that will space out these big announcements, uncorks a car that runs on compressed air. This car goes for an estimated $7,000 and can travel about 125 miles on $3 worth of air.

From a mobility standpoint, cheap personal transportation is a very good thing. As more people can afford to travel where they want to when they want to, beneficial economic activity and improved employment situations should result. Of course, will the benefits of personal mobility be outweighed by the costs of all those extra cars on the roads? Any of the small cars are going to be relatively clean and efficient compared with the average American vehicle, but there are far greater problems than simply fuel consumption or emissions. Who will pay for the parking spaces for all of these vehicles in poor areas? They can't just park them in their living rooms. The road congestion is another problem. I don't know how roads are financed in India, but increasing the number of vehicles will certainly crimp available road space, and at a time when roads should be shifting towards a user pays financing system it's probably not the best idea to add vehicles to heavily subsidized infrastructure. Lastly, who will teach all the new drivers how to drive? China is having trouble with this as it is. I can't imagine what might happen if the roads become flooded with new drivers.

In any event, Tata Motors is now a major player in the world of automobiles. I don't care one way or the other about who owns Jaguar, but tiny, cheap cars are an important innovation for personal transportation in much of the world. Compressed air is another fuel that may have some limited applications if anyone can be convinced to try it. One advantage that compressed air has for crowded and poor cities is that I suspect air tanks and refueling stations will be much easier to site than conventional gas stations. After all, many of the poor who will be the target of the Tata Nano live in communities where a rapid rise of gas powered vehicles will probably break what little fuel infrastructure exists. In many developing nations it is common to see stands on the side of the road selling liters of gasoline to fuel the motorbikes and such. I doubt these stands could or should handle the increase in consumption that many new cars will bring.
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