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India Accelerating - second of four articles: The Car Boom - New York Times

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  • Andie Miller
    INDIA ACCELERATING Second of four articles: The Car Boom http://www.nytimes.com/2005/12/05/international/asia/05highway.html India Accelerating | The Car Boom
    Message 1 of 1 , Dec 5, 2005
      Second of four articles:
      The Car Boom


      India Accelerating | The Car Boom
      In Today's India, Status Comes With Four Wheels

      Published: December 5, 2005

      VISHAKHAPATNAM, India - On the dark highway, the car showroom glowed in the
      night like an American drive-in. Inside, it looked more like a game-show
      set: bright lights, white floors, huge windows, high ceilings and ad posters
      of beaming consumers far paler than most Indians. For 36-year-old Ram Reddy,
      the price was right enough to make a down payment on his fifth family car.

      He and his brother already had one car "for the children," two "for the
      ladies," and so on. Now they were buying the Toyota Innova, a big-as-a-boat
      luxury van that retails for a minimum of $23,000, 46 times India's per
      capita income of about $500.

      The Innova is a new plaything of the moneyed here, one being peddled, like
      so many products in India today, by a Bollywood star. It is yet another
      symbol of the kid-in-a-candy-store psyche that has seized India's growing
      consuming class, once denied capitalism's choices and now flooded with them.

      Fifteen years after India began its transition from a state-run to a
      free-market economy, a new culture of money - making it, and even more,
      spending it - is afoot.

      This domestic hunger for goods has become an important engine for an economy
      that still lags in exports. So intense is the advertising onslaught, so
      giddy the media coverage of the new affluence, that it is almost easy to
      forget that India remains home to the world's largest number of poor people,
      according to the World Bank.

      Still, India's middle class has grown to an estimated 250 million in the
      past decade, and the number of super-rich has grown sharply as well.

      And, after more decades of socialist deprivation, when consumer goods were
      so limited that refrigerators were given pride of place in living rooms,
      they have ever more wares to spend it on: cellphones, air-conditioners and
      washing machines; Botox, sushi and Louis Vuitton bags; and, perhaps the
      biggest status symbol of all, cars.

      India has become one of the world's fastest-growing car markets, with about
      a million being sold each year. It once had only two kinds, Fiats and
      Ambassadors. Now dozens of models ride the roads, from the humble,
      Indian-made Maruti to the Rolls-Royce, which has re-entered India's market
      some 50 years after leaving in the British wake.

      Indians are discovering in cars everything Americans did: control and
      freedom, privacy and privilege, speed and status. Car showrooms, the bigger
      the better, are the new temples here, and cars the icons of a new
      individualism taking root. Foreign car companies, meanwhile, have discovered
      the Indian consumer - not to mention the country's engineering brain power -
      and are setting up plants across India.

      The growing lust for cars also reflects India finally having roads decent
      enough to drive them on. It is making a historic effort to upgrade its
      dismal, mostly two-lane national highway system into four- or six-lane
      interstates, its largest infrastructure project since independence in 1947.

      A New York Times reporter and a photographer drove one portion of the
      project, the so-called Golden Quadrilateral, which passes through New Delhi,
      Calcutta, Madras, officially known as Chennai, and Mumbai, formerly Bombay,
      earlier this year.

      The revamped highways mean that, for the first time in India, cars can go
      fast; thus the new appetite for fast cars. The middle and upper classes,
      already being lured by one of the world's fastest-growing domestic airline
      industries, are discovering driving for pleasure as much as need.

      "This is the American 1950's happening in India now," said Padma
      Chandrasekaran, a Madras resident marveling at the new ease of driving the
      205 miles to Bangalore.

      The new highways have seduced well-off consumers like Mr. Reddy, who plans
      to use the Innova for family road trips to places like the temple at
      Tirupati, about 400 miles south of here, a trip he would previously have
      made by train. The highway's smoother surfaces and additional lanes have
      also enriched him, by reducing fuel and maintenance costs for his trucking

      "If the roads were not good, we would not have this many cars," said the
      bearded Mr. Reddy, whose 9-year-old son already knows how to steer an

      Consumers' Appetites Grow

      The 8,300-square-foot Toyota showroom had been open only a few months, and
      its location just outside town on the silky new highway had already turned
      out to be a prime sales aid. The general manager chuckled, saying that if he
      gave a test drive on the road, it would be "a happy ride."

      That many of the city's one million residents are what Sastry V. Prakky, the
      dealership's senior sales and marketing manager, calls "filthy rich" also
      does not hurt.

      Named for Visakha, the god of valor, Vishakhapatnam faces the Bay of Bengal,
      in the state of Andhra Pradesh. The city is home to one of India's largest
      ports and the country's oldest shipyard. It is also squarely in India's
      booming south.

      Some residents have prospered by going to work in the United States in
      information technology, others by opening "business process outsourcing"
      centers. Many work in pharmaceutical production, or export carpets or

      Pricy hotels line the beachfront, and driving schools the side streets,
      although Indian driving habits raise questions about the quality of their
      instruction. Almost every beauty salon also has a "body weight reduction"
      center, reflecting the upper-middle-class's new obsession, and plumpness:
      people are still starving in India, but people are overeating, too.

      In a historical blink, capitalism, which postcolonial analysis once labeled
      poverty's cause, is now seen as its solution. Debt, once anathema for the
      middle class, is now an acceptable means to an end.

      For a sliver of Indians, the go-go years are here. The same sentiment has
      permeated the countryside, where young men drive bright yellow motorbikes
      with names like Ambition and dream of becoming crorepatis, or

      America, of course, went through a similar evolution: the making of a
      postwar consumerist economy; the introduction of credit cards and growing
      comfort with, and dependence on, debt; the rise of an advertising culture.
      India today offers the chance to watch it in real time, at a hyper,
      almost-out-of-control, pace.

      "Now the people want to spend and enjoy," Mr. Prakky said. "Everyone wants
      upgradation": the scooter owner wants a motorbike, the motorbike owner a
      car, the car owner a more expensive one.

      He was checking the paperwork on another new purchase, including a deposit
      of 180,000 rupees, or about $4,000. He took it upstairs to the general
      manager, C. Sudhaker, whose glass-walled office overlooked the showroom
      floor. In modern times, as Mr. Sudhaker put it, a good car was a business
      necessity, not just about showing off, although he conceded an appetite for
      "recognition in society."

      That appetite was on display in other showrooms along the highway.

      "Life is short, madam," said Sanganagouda Patil, a politician and landowner,
      explaining why he had to buy a new car model every two years. He was at
      another Toyota showroom, about 600 miles away in the state of Karnataka,
      inspecting the Innova even though he already owned four cars. Proper
      vehicles were expected of V.I.P.'s, he said, even if the roads near his home
      district were not yet good enough to drive them.

      He wore gold jewelry, Ray-Ban sunglasses and an expensive-looking white
      kurta of the hand-woven fabric that Mohandas K. Gandhi popularized as a
      symbol of swadeshi, or homegrown, in an era when all things foreign were

      Many Indian politicians today see the state merely as an object of plunder,
      and they are not shy about displaying their spoils. Car salesmen say that
      when a new model comes in, politicians call and demand to have the first
      vehicle delivered to them, with a discount.

      A Shifting Value System

      India's state-run rail network may have been built by the British, but it
      came to represent a certain egalitarianism. Powerful and voiceless, rich and
      poor - all navigated the same chaotic, crowded stations and rode the same
      jam-packed trains, if not in the same class.

      Cars, in contrast, reflect the atomization prosperity brings.

      This is a far bigger change for Indian society than it was for America,
      which in many ways was founded around the notion of the individual. Indian
      society has always been more about duty, or dharma, than drive, more about
      responsibility to others than the realization of individual desire.

      That ethos is changing. "Twenty years back one car was an achievement," said
      Maj. Gen. B. C. Khanduri, who as minister of roads from 2000 to 2004 helped
      shepherd the new highway into being. "Now every child needs their own car."

      To him and others who grew up in a different society, that change bespeaks a
      larger, and troubling, shift. "The value system is finishing now," he said.
      "We are gradually increasing everyone for himself."

      Luxuries are now necessities, he said, and children are focused more on
      earning for themselves than on caring for their parents. Indians have always
      been critical of what they see as American selfishness, the way children
      relegate parents to retirement homes so they can pursue their own lives.
      Now, suddenly, they are hearing such stories among themselves.

      Spreading affluence also has brought new competitive anxiety. Where once
      everyone in a neighborhood had an Ambassador or a Fiat, the hierarchy of
      livelihoods, of success, now can be parsed easily through cars.

      P. V. J. Mohanrao, 48, an assistant college professor, who came to the
      Toyota showroom to look at the Innova, could afford only cheaper cars: the
      Indian-made Maruti and Tata Sumo.

      A neighbor who was with him, P. Srinivas, 41, a businessman dealing in
      glass, could afford larger monthly installments, and thus the more luxurious
      Chevrolet Tavera.

      Another neighbor, a software entrepreneur who, Mr. Mohanrao pointed out, had
      "spent time in the United States," outclassed them both: at any given time,
      he had three or four cars, none of them cheap.

      "He has booked this car, I heard," Mr. Mohanrao said of his neighbor and the

      The car fever here is in part a triumph of marketing to people who did not
      grow up being marketed to. Advertising in India has succeeded in making, as
      Mr. Khanduri said, luxuries into necessities, in portraying persuasion as

      The Toyota salesmen here market aggressively, singling out beach walkers and
      mall shoppers. They aim at people who bought cars in 2002 and convince them
      they already need an upgrade. Helped by record-low car-loan rates, they have
      learned to manufacture desire. "If that fellow has a burning zeal we will
      add to the fire, we will tempt him," said Mr. Prakky, the sales manager.

      The Dangers of the Boom

      "Please do not drive in the wrong direction," a flashing sign implores over
      the redone highway.

      The feeble exhortation underscores one of the many downsides of India's auto
      boom. The country already has one of the world's highest accident rates,
      with more than 80,000 traffic-related deaths a year. Few police officers
      patrol its roads, which ensures that pretty much anything goes, even at
      times on the fancy new highway.

      With India reveling in its rising global profile, there has been little
      planning for the traffic, environmental or economic consequences of millions
      more Indians acquiring new cars. India's economic boom has outpaced any
      planning for the resources, like oil for auto fuel, it will demand. Urban
      planning is so poor that in Bangalore and other cities traffic congestion is
      threatening investment and business expansion.

      At the same time, the focus on cars threatens to obscure the needs of the
      many more without them. There are still only about eight million passenger
      vehicles on Indian roads, in a country of more than one billion people. By
      the late 1920's, in comparison, the United States had 23 million registered
      car owners.

      Poor Indians rely, in addition to their feet, on an extraordinary array of
      contraptions for transport. They pile on top of buses in the Indian version
      of the double-decker. They ride tractors and bullock carts and pack 13
      strong into Tempo taxis made for 6.

      What they cannot regularly rely on is public transport. While New Delhi and
      Calcutta have built subways, most cities have not, and they face severe bus
      shortages as well. Cars speed by waiting bus riders, who stand like

      The rise of the auto, and the investment in highways, dovetails with a
      larger trend of privatization in Indian life, in which the "haves" are those
      who can afford to pay for services the government does not provide:
      efficient transport, clean water, good schools, decent health care.

      Most Indians cannot afford the tolls along the Golden Quadrilateral, let
      alone the cars to drive on it. Gandhi, whose foot marches for social justice
      defined an era of Indian history, now has an expressway named for him. Its
      toll of $1.33 is more than about 300 million Indians earn in a day.

      India's growing material hunger has another downside: it is largely being
      sated by credit and debt.

      With borrowing comes the danger of overstretching, and pricy cars purchased
      in Vishakhapatnam's Toyota showroom can always be taken back.

      That is where the repo man comes in. He waits at a tollbooth in Rajasthan,
      cater-corner from Vishakhapatnam on the Quadrilateral, armed with a long
      list of deadbeats' license plate numbers.

      In a beat-up Maruti van, with a stick inside, Anil Kumar Vyas, 34, was
      chasing down Toyota owners behind in their payments. Befitting his
      upper-caste Brahmin status, he was also a local village head, but that
      brought more prestige than profit.

      His may be one of the few lines of work that has benefited from traffic jams
      and potholes. Bad roads made for easy captures, since no one could drive
      over 22 miles an hour. On the new, smooth four-lane highway, he has already
      given chase at more than 60 miles an hour.

      "It is harder for us to catch them," he said. "We're still working it out."
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