EXPLAINED: Why India shouldn’t follow the developed countries’ model for urbanisation

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February 20, 2020 5:15 AM

The chairman of Celeris Technologies shares with Sushila Ravindranath the near-future disruptions in the field of automotive and mobility, and why India shouldn’t follow the developed countries’ model for urbanisation.

auto sector, auto industryThe Indian automotive sector has been hit by three separate tsunamis concurrently, says V Sumantran

V Sumantran – the chairman of Celeris Technologies shares with Sushila Ravindranath the near-future disruptions in the field of automotive and mobility, and why India shouldn’t follow the developed countries’ model for urbanisation.

He is the chairman of Celeris Technologies, the global mobility advisory and consulting firm, and an advisor to several Fortune 100 organisations in the auto, tech, industrial equipment, and aerospace sectors. Previously, V Sumantran has worn many hats—he was the executive vice-chairman of Hinduja Automotive, UK, vice-chairman of Ashok Leyland, and CEO of Tata Motors’ car business in its formative years (he oversaw the development of the Nano).

When we decide to meet for lunch, we choose Chennai’s oldest and one of the most popular hotels, the New Woodlands. Although its main dining halls are almost always crowded, it is possible to find a quiet table at the hotel’s Vrindavan Restaurant, which is tucked away in a corner of the sprawling compound.

I wish to talk to him about the future of automobiles, especially in India, a subject he has been writing and extensively speaking about. Sumantran, I must add, is the co-author of the 2017 book Faster, Smarter, Greener: The Future of the Car and Urban Mobility by the MIT Press, which is in its second print now, and serves as the lead-member of the Consultative Group on Future Transportation at the Office of the Principal Scientific Adviser to the government of India.

We take our seats. Vrindavan is a multi-cuisine vegetarian restaurant with a variety of choice. We decide to be adventurous and order spring-roll dosa, and also play safe and order rava dosa. We are served tender coconut water with the order.

“The Indian automotive sector has been hit by three separate tsunamis concurrently—the migration to BS6 emission norms, electrification, and redefinition of what is mobility,” he mentions about the current disruptions. “The second and third changes, in particular, are affecting the entire global industry.”

He adds that, in India, under normal circumstances, BS6 should have been a booster dose for the industry. “There should have been pre-buying of both personal and commercial vehicles. But this hasn’t happened for various reasons such as the sluggish rural economy, introduction of GST bringing down the turnaround time of commercial vehicles, higher tonnage being permitted, the NBFC crisis, and some other issues,” he says.
However, BS6, he maintains, is not the reason for falling sales. “India has been better prepared (for BS6) than it was for BS4. However, the products will become more expensive. On the flip side, more markets will become accessible. With parity with global standards, we can now export two-wheelers more aggressively,” he says.

I ask Sumantran about electric vehicles, and if dealing with electrification will be a major challenge. Electrification, he replies, provides good opportunities for two-wheelers and commercial vehicles. “We have to build scale for public transport. China is way ahead of us. If our industry has no degree of protection, we will be wiped out. The integrated sum of what we have to do is very large. We have to concentrate on the parallel development of infrastructure. The quantum of electric power a citizen consumes now has to rapidly grow,” he says.

Having finished our dosas, we decide to order the restaurant’s continental platter. The server assures us both the taste and spread is good, including French fries, sandwiches, vegetable au gratin and salad. We share the platter as the portions are generous. It is essentially a South Indian version of continental food; delicious nevertheless. We go back to our discussion.

“To get electrification going, we have to make investments to build capacity in manufacturing batteries. Even if 25-30% of our two-wheelers go electric by 2025-26, we will need battery-producing capacity of 30-40 Gigawatt hours (GWh). As of today, the global capacity of batteries for electric vehicles is 30-40 GWh, and this includes the Tesla Gigafactories and all of Chinese factories. Maruti Suzuki has put up a 1 GWh factory at a cost of Rs 5,000 crore. Even if costs come down in the near future, an investment in 30-40 GWh will require around Rs 60,000 crore. That is a lot of money, and we cannot afford to have any distractions,” he shares the numbers with me.

Sumantran, however, is hopeful that most of the grid expansion will happen with renewable energy. The future, he says, has to be significantly different.

The third major disruption will come in the way we look at mobility at both micro and macro levels. Sumantran says that unplanned growth has led to uncontrolled urban sprawl. “Today, the US, Europe and India have 800, 600 and 50 cars per 1,000 households, respectively. In Bengaluru, for instance, that number has grown to 200-250 cars. If we continue to follow the developed countries’ model, we will have no place to put our cars. Japan has a very high density of population in their cities, yet their quality of life has not been compromised. Tokyo grows vertically. It allocates only 15% of the land for roads. We have to rethink the way we plan urban layouts.”

As we wait for filter coffee, Sumantran tells me that most Indian cities are growing the Los Angeles way, spreading outwards. “More roads will not solve the problem of rapid urbanisation as the economic value of the land is extremely high. Governments can’t be allocating lands for only roads. Typical cities in the US allocate 30-40% of land for urban roads. India cannot afford to do that. We have to remember that 53% of our population will be living in urban centres by 2050, compared to the current 35%. The average speed of mobility has dropped to 15 km per hour in India,” he says.

According to a survey conducted by the Boston Consulting Group, congested and jammed roads during peak hours in the four major cities of Delhi, Bengaluru, Kolkata and Mumbai cost the nation Rs 1.47 lakh crore per annum. Vehicle emission rates are increasing. “Flyovers and double-decker buses are not going to solve the problem.”

Sumantran, however, adds that all is not lost. “The glass is half-full; we have so many options and opportunities. The smartphone has provided us multiple ways of staying connected. Hopefully, in five years, we will find ways to house and transport people much more efficiently, and will build an efficient mobility architecture,” he says.

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