India’s auto sector continues to remind us of the painful slowdown that the country is undergoing. In August, sales of passenger cars slumped 41% year-on-year, with market leader Maruti witnessing a 36% fall. Sales of Alto, its entry-level hatchback, have halved. According to news reports, Maruti chairman R.C. Bhargava has apportioned some of the blame to affordability. Extra costs on account of stricter safety and emission norms, in his view, have driven cars out of people’s reach. While he has also mentioned other factors that have held sales back, his point on safety invites a debate.
Apart from greener technology, India has mandated anti-lock braking systems and air bags in all cars. It takes money to install these, but there is a good case for making these compulsory. Consumers often ignore the invisible damage they cause the environment. They also tend to overlook risks. In such cases, state intervention is justified. If cars are too expensive, then other costs deserve scrutiny. Could better economies of scale be squeezed out by making fewer models, for example? There are no easy answers. We do need cheaper cars, but not at the cost of safety.