India Accelerating - second of four articles: The Car Boom - New York Times
- INDIA ACCELERATING
Second of four articles:
The Car Boom
India Accelerating | The Car Boom
In Today's India, Status Comes With Four Wheels
By AMY WALDMAN
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
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,
"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
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
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."