Friday, September 08, 2006

Cars, fuel and roads

I mean automobiles and not just cars. In todays newspaper itself, the total value of the investments lined up is over 4000 crore INR. Maruti is expected to invest INR 3000 cr, Tata Motors about 10, 000 cr and Honda SIEL about INR 900 cr. Meanwhile, Toyota plans a small car for India in 2-3 years. The auto sector is expected to set a scorching growth rate.

All of which is fair enough - there is demand for cars, India can be a manufacturing/export hub of cars- but if they are all trying to sell in India, where are the roads? And more importantly, what is being done about it?

The other thing, is around oil prices. Unless we see a move toward alternative fuels, I think all these estimates will peter out in the next few years. Some of the new launches have been smart - the WagonR Duo is an LPG/petrol combo, so the companies will adjust. But India is not readying itself for alternative fuels in a big way yet. There are lines outside CNG filling stations in Bombay and outside LPG filling stations in Bangalore. We need more pumps that dispense alternate fuel - perhaps more companies to get into it. Perhaps we need to look at ethanol like Brazil (75% odd by 2006) - though for alternate fuel, it has be a mix of all these options initially (hybrid cars, battery operated like the Reva, CNG, LPG, ethanol) since there is nothing that can take the place of oil in the short run. Apart from automobiles, moving away from oil also has great geopolitical advantage.

Update: Ethanol blended petrol in all states from Nov 1.


Paddy said...

Ethanol also has its own set of nuances as they are costlier to produce than gasoline. The realisations are better if they sell cane to a sugar producer than for the purpose of ethanol. So ethanol itself is a unique proposition. Read more about Ethanol here

Also apart from roads where are parking spaces?

A good parallel is the airline sector. The sector was thrown open before anything was done to airport infrastructure. Telecom - a better story but largely similar. Industry growth is strong but power shortage is crippling growth.

Hope somebody is watching !!

Siva Rajendran said...

There is lot of happening around the globe to find an alternative to oil. But regarding the infrastructure no one will help us. Govt. has to wake up and start impelementing projects that can meet the future traffic.

shikhil said...

Alternative fuels are the way to go in the future especially after the 2 to 3 folds increase in the crude oil prices. At higher crude oil prices Ethanol actually becomes more cost effective.. It took Brazil 10-15 years to fully develop its Ethanol capacity. In Indian context the government is looking at only 5% Ethanol blend. The cost to the oil co. is likely to be arround Rs. 27/lt (price quoted by sugar co's) or Rs. 21/lt (price oil co's are willing to pay).

In India we cannot go for all out production of Ethanol like in Brazil which is now almost import free for its energy needs. Our sugar crops are mainly used for producing sugar. And sugar co's are thinking about making extra money by converting sugar mollases into Ethanol. Sugar industry is a booming industry which is at its peak.

Anyways for india we have to also look at other alternatives like BioDiesel from Jatropha plant and even Ethanol made from Genetically modified Sweet Sorghum..

Venks said...

But I agree with nearly all our crude being imported , we could nearly be 50% better off on our trade surplus if we were not importing any crude.

A new avenue for Sugarcane could also result in better prices for our farmers and in more land being used for farming. Central procurement to ensure equivalent pricing and good returns could be a massive boost to farmers.

how would one protect the crop against natural calamities , could be one open question, but still it will be cheaper to import sugar cane than crude.

More importantly a country like India is so polluted that it is nearly uninhabitable.

Roads the eternal question, what the @#$$ is happening. When will we ever learn to lay roads. I dont believe any road other than the Mumbai pune expressway is worth its salt. So why not replicate the same road through, even simple things like banners on the road are not regulated, but Neel as you pointed out that might evolve.

Question is will we ever get to see any of this in our lifetimes.

The ethanol question is will it be implemented ?