Sunday, 15 January 2012

More is Less

"You can have one in any color, as long as it's black". Thus spoke Henry Ford, regarded as the father of the modern automobile industry, about his legendary Model T, the first car for the "masses", which sold over 20 million units before it was finally taken out of production. While one can attribute the comment to Ford's well known idiosyncracies (after all, this was the person who was also quoted to have said "History is bunk"), it in a sense reflected the relationship between producer and consumer that existed at the time. The car manufacturer, in a market of only a few players, was all powerful, and could therefore dictate what the consumer could or could not have in the car. The aspiring driver was constrained to what was provided, and if that meant everyone drove around in cars that were little different from funeral hearses, then so be it!

Nearly a century on, the tables have clearly been turned. Someone wishing to buy a car today has a choice of over two dozen established manufacturers, each with perhaps a dozen different models, dozens of features ranging from cupholders to entertainment systems, and every possible color that one could invent in a laboratory. And, as the visitors to the recent Delhi auto show found out, car manufacturers are falling over themselves to capture the hearts (and wallets) of the second biggest market in the world. Just as mobile phones conquered the Indian landscape, and put an end to the much maligned land-line, automakers the world over are licking their chops in anticipation of gaining even 1% of market share in the land of a billion consumers. The ancient Ambassador, once the staple of government departments and taxi fleets, is soon going to end up as a museum piece, a relic from a bygone age when Indians had to be content with whatever junk was sold to them in the guise of personal transportation.

The fact that Delhi has an auto show to begin with is remarkable - it shows that the Indian car market has finally come of age, and is a place where the much anticipated unveiling of new ideas can happen. And these are not just cheaper versions of models available in the West - gone are the days when Indians are going to accept a stripped down version of a BMW or Lexus. They want the best, and VW or Ford or Hyundai had better be willing to give them first pick on a car that is the envy of the rest of the world - or at the very least, their neighbor who bought a new set of wheels just six months ago.

The media, of course, is crowing about how all this "choice" for the consumer is great. But is it really more choice - or less? The fact that one can now walk down the street, browse through half a dozen showrooms and walk out an hour later with a shiny new automobile sounds like a consumer's dream - but in fact it represents a significant reduction in the choices that one might make for transportation. Why? Because once you possess our own private mode of transport, your incentive to use any other option is significantly diminished. Delhi today has an outstanding metro system created from scratch, which would be the envy of any major metropolis - and yet its ridership is a mere 2 million, a significant under use for a city with a population in excess of 15 million. In cities like London and New York, affluent white collar workers use the subway or go by bus - but in India, and especially Delhi, the sight of a mid-level manager sahib being chauffeured to work by a driver is the dominant social statement, a sign of having "arrived".

I still recall learning to drive in the relatively quiet roads of Chanakyapuri, long before the invasion of foreign manufacturers caused the boom in car ownership. Driving in most of New Delhi, and even parts of Delhi outside the ring road, was a lot of fun in the early '90s, and took relatively little time to get from point A to B - this in a dinky little Maruti 800 without a/c or radio, let alone a DVD home theater system! Now contrast that to the scene  today on Mehrauli Road, or Ring Road, or just about any major road in the city, where cars are virtually in gridlock for hours - fine driving machines that boast to speeds of 200 km/h, have the ability to accelerate to 100 in 6 seconds, rendered impotent for the simple reason that there many more of them than the road can accommodate. And this is after building countless flyovers to ensure a smooth flow of traffic around the city, without the unwanted interruptions caused by traffic signals. The chaos on the roads cannot simply be attributed to another governmental failure, although God knows that better quality roads would certainly help. No - the fact that the consumer has been seduced into buying a product, without pausing to think of the possible negative impacts that might result from the purchase, is a prime reason for the state of affairs.

In the midst of all this, the auto companies are the ones coming out on top, and you can't blame them. After all, the job of a car company is plain and simple - make and sell cars, hopefully for a profit. One cannot expect them to suddenly don the garb of social responsibility and advise their potential customer that "Buying this car can seriously increase the amount of stress in your life, not to mention the toxic fumes that you might have to inhale every day on your way to and from work". It took the work of a lone crusader, Ralph Nader, to drive the global car industry to adopting standard safety equipment like seat belts and air bags - they did not come up with those on their own. So it seems quite unlikely that they would go out of their way to find solutions to the dilemma of millions of frustrated motorists. Every auto executive at the show has been very clear as to how "India is the place to be" and "forms a key part of the company strategy". Not a single one has made even a passing comment about how the long term is being impacted by an increasing population of cars. Presumably they did not drive themselves to the auto show, or flew in by helicopter to avoid the long queues leading to the venue!

Even the most diehard of environmentalists will admit that it is a losing battle to suggest that people simply stop buying cars - after all, India is a developing nation, and we have the right to aspire to the same quality of life as our Western brethren, and if that means having one (or two or three) cars, then why not? This is where the second revelation from the auto show is cause for concern - the shift in consumer preference to larger cars, in particular what is being branded as a "small SUV". While the notion of a vehicle that looks like an SUV but has the fuel economy of a car would be hailed as a revolution in the West, it is positively scary news for a market where small cars have ruled for so long.

When one looks the development of automobile transportation in the West, there are two distinct models that emerge - the US (big, gas guzzling cars) and Europe (small, fuel efficient ones). These two paths were the natural fit for both environments, based on the amount of road space for driving around, and the inherent choice that the citizens in both places had made as far as the importance they would give to the car. For a while, it appeared as though India (and China) were firmly going to follow the European model, with fuel efficiency standards well ahead of those in the US. But now, with the "small SUV" concept set to potentially take grip on the streets of Delhi, Mumbai and eventually (in the dreams of the auto execs) Ludhiana, Jaisalmer, Madurai and Shillong, the needle is moving in the opposite direction.

That this is purely a sales job should not really be a surprise - humans are not conditioned to come into this world to want a certain type of car (or to even want a car, for that matter!). It is a manufactured want, that gets portrayed as a need, by an industry that dominates so many communities around the world (and, ironically, can destroy them as well, as in the case of Detroit). Using words like "powerful", "strong", and "mighty" to describe their product, they imply to the potential customer that these attributes would automatically transfer to them upon ownership. In contrast, words like "small", "compact" and "efficient" translate into weakness, a definite death sentence for an emerging market that wants to imitate its more successful brethren abroad. Perhaps the tale that Indian consumers need to remember is that of Vamana avatar, the dimunitive form of Lord Vishnu, who was able to humble even the mightiest king misled into contempt on seeing his small size. The phrase "small is beautiful" exists for a reason, and new generations of Indian drivers need to discover it for themselves, inspite of the constant pitching to the contrary from the Fords and Hyundais of the world.


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