China : Auto Anarchy..Not Quite So

It is very evident that the immediate future of the automobile industry lies in the hands of young buyers across Asia. Similar to mass demand for the mass produced Ford Model T in 1914, auto enthusiasts in China are demanding cars, but at a complete different level.

According to AlixPartners, a consultancy, worldwide market for cars will grow to 107 million units a year in 2020. China, the current market leader for cars will remain a leader way past 2020. Projections of annual car sales are set to be at 31 million units by 2020. This figure is six times more than the combined car sales of Japan and South Korea, double the size of Western Europe car sales and 11 million more units of sales seen in North America. Even with such numbers the Chinese government has its nose up in the air.

The PRC is bothered with the fact that it still does not have a single automobile company that can provide stiff competition to Western counterparts. In a bid to improve this situation, the Chinese government has put conditions on foreign automobile companies, a cost to enter the Chinese market. Foreign car companies are required to form joint ventures with domestic car players.

According to Bernstein, this policy measure has proved futile. While the Chinese government hoped that Chinese car companies would learn from foreign experience, a situation of dependence has occurred. Chinese car companies are highly dependent on foreign technology and pay heavy royalties for use of foreign brands. Even the Chinese consumer has large preference for foreign brands.

The question of interest is - which are these new technologies over which China is being arm wrestled. We can broadly divide the technology initiatives under three classifications –
1)      Electric powertain advancements
2)      Tech based policy adjustments
3)      The Driverless car ambition

In the next upload we shall look at each of the three solutions which have already gained momentum in the second decade of the 21^st century.

EMBARQ CONNECTKaro Event

The above is a screenshot of a  live web cast to which I received an invitation organized by EMBARQ India.  This is EMBARQ's first annual conference titled CONNECTKaro which literally translates to 'do the connect'. In context of the conference it was an apt title signalling the need for improvement and integration of public transportation in the city of Mumbai in order to stimulate public transportation habit and usage. I attended the opening session and found a link in the key message delivered by the various speakers.

EMBARQ is the World Resources Institute's Center for Sustainable Transport. It is recognized as an independent think tank in India and other emerging economies. The conference began with an introduction from a member on WRI's Board of Directors -

Mr. Jamshyd Godrej - Emphasized on the need to realize urgency in upgrading transport fuel grades in India to Euro V and VI standards.

Mr. UPS Madan - Being the current Commissioner of Mumbai Metropolitan Regional Development Authority explained transportation as we see it on the roads today. He argued that widening roads and continuously building highways is not the solution to public transportation. This is not sustainable as the demand for privately owned vehicles is ever increasing.

Mr. O.P Gupta - He is the General Manager of BEST Undertaking, Mumbai's public bus service. He mentioned that road safety is very important. The city lacks public discipline as seen by overtaking private vehicles and BEST buses even on a traffic packed road. He concluded by saying 'effective public transport is clean and dignified' this is a means to get more individuals to use public transport.

Dr. Sudhir Krishna - He is Secretary, Ministry of Urban Development. He gave various examples of sustainable transportation development across India -

a) Delhi bus fare - It has played an important role in changing attitudes of bus commuters. The air conditioned buses charge Rs. 10 which has resulted in members from all economic classes to travel together in the same bus

b) As per the Union Budget 2013, Jawaharlal Nehru National Urban Renewal Mission  with get 10,000 additional buses for city commuters

c) Transit Oriented Development as seen by the Mumbai-Delhi Industrial Corridor

d) Bengaluru observes a Bus Day on fourth of every month to promote public transportation. Mysore's bus depot can be compared to a 'museum'.

e) In the future  mass transit projects such as metro should be under the administration of the municipal corporation of a city. Responsibility in the hands of local authorities will ensure success of such projects.

Professor Jan Gehl, video recorded message - He is the founder of Gehl Architects. In the video recording he spoke heavily on the effectiveness of walking and cycling as an effective means of non motorized transportation. 

Ms. Henriette Vamberg - She is a director and Head of Gehl Cities at Gehl Architects and spoke in lieu of Professor Gehl. She suggested that city planning should develop bicycle lanes for maximum bicycle use. In many countries ministers use bicycles to get to work. This practice is not frowned upon by the citizens and instead motivates masses to embrace cycling as a daily means of commute.

Mr. Madhav Pai - He is Director at EMBARQ India and was the host of the dialogue.

In my opinion, the broad message drawn from the speeches of the speakers is requirement for change in attitude towards public demand for public goods, in this case transportation. This change in attitude will favour  expansion of public transport services and as a result challenge the existence of unsustainable means of private transportation.

National Conference on Emerging Market Economies

Earlier last week I attended a conference at Ruia College, University of Mumbai. As the title suggests it was an Economics conference focused on examining the role of Emerging Market Economies in the 21st century. I would like to get into certain details of the conference as here is where I presented my first paper. It is on Environmental Economics, titled : Asia - Potential for Green Economy.

Over the three day conference speakers spoke about issues concerning Macroeconomic Policy, Banking, Finance and Insurance in India, Trade and Investment in India and there was also a panel for Environment and Energy Economics. The opening evening saw Ruia College's two esteemed alumnus - Economist Lord Meghnad Desai and Member of Planning Commission Dr. Narendra Jadhav.

Dr. Narendra Jadhav, speaker of the evening, presented his findings on Emerging Market Economies where he studied all countries with a population greater than 30,000. He spoke about economic literature of emerging economies, coining of term 'Emerging Market Economies' and concluded by raising a question - now that the West is in debt, how and from where will Eastern economies generate income?

That evening I got an opportunity to talk with Lord Meghnad Desai. Lord Desai gave me research direction towards my next paper. In the above mentioned paper I have drawn conclusion by estimating year when India will achieve bend on Environmental Kuznets Curve.

Lord Meghnad Desai

The following two days and specifically lecture by Dr. Dilip Nachane, Emeritus Professor, IGIDR, Mumbai I was introduced to Efficient market hypothesis, Jackson Hole consensus and inverted U relation between  financialization and economic growth. At the panel on Environment and Energy Economics chaired by Mint newspaper Executive Director, Niranjan Rajadhyaksha, panelists included -

Dr. Pushpa Trivedi professor at Indian Institute of Technology, Mumbai spoke about National Income versus National Resource Counting,

Dr. Dinesh Hegde, professor at National Institute of Industrial Engineering, Mumbai spoke about Environment, Energy and Technology Interface and

Mr. Girish Kuber, Executive Editor, Lok Satta newspaper discussed the role of oil in everyday life, economy and cause for political imbalance. 

The valedictory function was a lecture by Economist Ajit Ranade. He spoke about all aspects concerning China's economy. The lecture was very informative and interactive, as audience was dominated by college students. The conference was a success and I am looking forward to pursue research in Environmental Economics. 

Car-Plane, Road Plane or Flying Car...

Twenty two years ago, a modern day flying car was built and operated by a certain Canadian engineer. He revealed that such an idea need not be a concept and flew his M400 at an altitude of 20 meters. Catering to modern day transport dilemma (a growing concern even in 1989) he opined that a vertiport shall provide solutions to urban transport. This is at the cost of rising petrol prices, ear tearing noise levels, safety risks, low fuel economy and a whopping initial market price of one million dollar a car. Paul Moller's Skycar never became legal and imagining someone paying a million dollars on a flying experiment, they would rather spend that on a McLaren.

 In 2004, BBC published an article titled 'Flying cars swoop to the rescue' deriving an alternative use of the car- plane. A resourceful piece from the article - "When you try to combine them you get the worst of both worlds: a very heavy, slow, expensive vehicle that's hard to use," said Mark Moore, head of the personal air vehicle (PAV) division of the vehicle systems program at Nasa's Langley Research Centre in Hampton, US. NASA aspired to develop sustainable means of smaller capacity planes. They aimed to develop technology such that small sized planes would fly as silent as a motorcycle, by 2009. All of this is indicative of efficient alternative source of dual passenger air travel.

Flying Cars of the Past, Present, and Future

 Today, after decades since the thought of a car plane conceptualized and watching Chiity Chitty Bang Bang, a tech firm, Terrafugia, based in Woburn, Massachusetts is on the way to selling its first commercial road plane - Transition. With tests already taken place, this is no concept and aims to go on sale by end of 2012. The model aims at promoting air travel and specifically to those who wish to acquire a pilot’s licence. As the name suggests the model would work as an airplane and an automobile, hereby a pilot would not have to change vehicle during flight or on road. No wonder, already 100 Transition models have already been booked. Overlooking fuel economy of 14.9 kilo meters a litre on land and a range 643 kilo meters in air, companies must pay strict attention to safety measures. 

Transition

 Development in the field of safety standards in air travel, automobiles or "flight-mobiles" in the twenty first century is largely going to advance through sensor technology. We must realize that even though these vehicles are designed to run on petrol, personal air transport is proving to be take form in a big way. The American companies have paved the way and found a practical solution to an alternate source of transport. Hopefully such engineering marvels sustain and are seen in significant numbers in a year from today.

Second Generation Biofuels – Economists and Politicians

In a continuation to the previously mentioned entry about second generation biofuels, over here, I have attached two pages from the same report. 

It highlights a direction for economists and politicians who could take steps towards making biofuel more readily available and acceptable at mass level.

Second Generation Bio-fuels in Switzerland

Earlier this month I was given a synopsis report of Future Perspectives of 2^nd Generation Biofuels. It is a study conducted by Centre for Technology Assessment in Switzerland. Here, I read an interesting piece on various types of 2G or second generation biofuels. It is interesting to learn how science and research is progressing and looking at new and rare means to launch alternative forms of biofuel.

The first thought that struck my mind was really to understand what first generation bio fuels are. It is the conventional production of biofuel through sugar, starch and vegetable oil. There are limits to its contribution as an alternative fuel, as after a certain point it proves a threat to biodiversity and food crops. Also, the economics does not make much sense as it is not very cheap in comparison to oil.

This might look right from the textbook. I hope the accompanied images make this entry an interesting read. The various sorts of second generation biofuels include –

Slurry and Manure – Achieved from raising livestock, this material is very cheap to procure. It is economical and technically possible to produce and is available in large quantities across Switzerland. The country produces 0.1 petajoules of biofuel and has a potential of over 21 petajoules. As a whole, the potential capacity is equal to energy obtained by burning 716,000 tonnes of hard coal.

Organic Waste – Three quarters of organic waste in Switzerland is used to produce energy, 89% in refuse incineration plants and 11% in biogas plants. The only drawback of organic waste as a source of biofuel is that it requires specific plants and technology to process.

Fallen trees – Fuel can be produced through felled round timber, sawmill waste or other timber demolition waste. In 2007 2.2 million cubic meters of total felled timber was used to produce fuel. In the near future this number would rise to 3.1 million cubic meters in Switzerland. Also, the country has a potential capacity of 1.2 million tonnes of waste wood to produce fuel from the existing 1 million. The specific drawback of timber from demolition waste is rigid usage and processing requires large plants with appropriate filters.

Straw – As a raw material, straw is found in small quantities as a whole, across Switzerland. In 2006 the Swiss straw crop amounted to about 58,000 tonnes. It is found in the form of manure in farms and can be directly used to produce biofuel.

Exotics – Miscanthus, a plant which is efficient in photosynthesis and thus highly productive is found largely in the USA. In Switzerland, the climatic conditions make it capable of growing Miscanthus. Once sown, the plant can be used for 25 years. The only drawback is that it has limited flexibility in cultivation.

Miscanthus

Finally we must realize that biofuel is a major potential fuel in automobiles. It is mentioned in the report that “increased vehicle efficiency could substantially improve the outcome for biofuels” also “for efficient vehicle technology to be able to help biofuels to replace a substantial proportion of fossil fuels, lower fuel consumption must not be (over)compensated by more frequent and longer journeys.

Back to Basics

Today is the last day of February, it also happens to be "leap" day, 29th February, 2012.

I would like to conclude this month with two very interesting videos that have caught my eye.

The first video is a GOOD Magazine production. It cites examples of sustainable transport across cities -

This video is part of IBM initiative, TheSmarterCity. It emphasizes on transport working as a collective system -

I hope viewers learn something new out of these two videos.