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Nigel's Blog - what will be the impact of the Tata Nano?

Nigel Brown of Peter Brett Associates thinks the Tata Nano, the micro car that costs as much as a fancy scooter, could have a major impact on engineering skills in the UK, as it is indicative of India's boom and will draw people back there, but also provide opportunities.

Imagine, for a moment, that Tata Motor's low-cost "Nano" car succeeds in luring millions of drivers in India away from motorcycles and into four-wheel vehicles.

Limited and outdated transport infrastructure and high petrol prices notwithstanding, we're likely to see more low-cost and no-frills cars from the likes of Renault, Nisan and Toyota, fuelled by the prospect of millions of new consumers in India and China.

What is most intriguing is the reaction from the developed world. How do they do it for that price, we ask? It would seem that added extras such as European-standard sophisticated emissions controls are only included in the deluxe version.

Others ponder the environmental and economic impact of many millions more car owners on India's already congested roads.

That the motor industry could act as a catalyst and driver for economic growth is not new. Post-war car exports from Henry Ford helped to rebuild England, and Germany and Japan's post-war fortunes had more humble origins before they began to export luxury vehicles. So, taking a more balanced view of sustainability, why would we not see a Mercedes-equivalent export from India in 30 years' time?

History and current practice suggests that the environment pays for improvements in standards of living. It is not beyond the realms of possibility for India's transport planners to favour an extensive network of road and highways – sound familiar? – At the expense of well-planned urban environments and public transport.

Yet nothing is written in stone. Perhaps the Nano of the future will prove to be a genuinely recyclable reality, relying on battery or hybrid power. It could become a shared asset between consumers, available for a few hours or for short journeys as needed. We need to think beyond the limiting boundaries of our past experiences, priorities and standards before condemning the next generation of car owners to the same fate.

As we herald this new highway age in one of the world's most congested nations, new opportunities unfold. Will there be new demands for engineers? Will developed nations export skills to India? Or will we be mere spectators, hoping they do not make the same mistakes as we did in the West?

If you believe the Nano will have little impact on the UK and its Western neighbours, consider this:

To plan and build the transport infrastructure India will need to cope with the anticipated increase in traffic – even at a minimal, constrained level – could result in a recall of engineers currently working in the UK and across Europe. There is also the very real prospect that future engineering graduates may prefer to build their own transport infrastructure than work in the UK or in outsourced engineering operations.

This brings our own skills shortage into sharp focus, and should add impetus to current industry initiatives to address this. But there is a silver lining; the Indian market could itself increase in value in the longer term, as salaries and living standards for local Indian employees rise.

If you are still wondering how to get your hands on a Tata Nano for yourself, you're not alone. As a society, we regard car ownership as a right. Yet if India, with a proportion of car ownership to population far less than that of the USA in 1920, should not pursue an individual car ownership strategy, it stands to reason that neither should the rest of us.

We all need to rethink our approach to transport strategies, while the low-cost cars have yet to be sold and the new highways remain a pipe dream. Just think what lessons from Tata Nano we could apply to transport worldwide.

- Nigel Brown is a partner at Peter Brett Associates & Managing Director of PBA International ltd.

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