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Market Failure



Cheaper cars set to clog Indian roads

Car ownership will soar amid warnings of pollution disaster


-- PHOTO: AFP


NEW DELHI - IT MAY be an Indian consumer's dream - cheap cars within reach of millions in a swelling middle class. But it could also prove to be a traffic and environmental disaster.


Nissan Motor and Renault announced last week they were looking at producing a US$3,000 (S$4,600) car to compete in India against Tata Motors' planned US$2,500 'people's car' to hit the market next year.


For its supporters, cheap cars like these are what the Volkswagen Beetle was to Germany or the Mini to England - the spoils of an economic boom for aspiring middle classes.


To its detractors, India will see an explosion in traffic and pollution on its already clogged roads from its more than 1.1 billion inhabitants.


It will add to India's carbon dioxide output just as many Western nations push the Asian giant to control emissions.