Why India had 10-year waiting lists for scooters in the 1970s

 

India is a major scooter and motorcycle exporter today. During April-September last year it shipped 22.5 lakh two-wheelers abroad. But back in the 1970s it didn’t make enough of these vehicles for its own use.

At the start of the 1970s the waiting period for a scooter in India was 7 years. With 2.6 lakh pending bookings and annual production of just 48,392 scooters in 1970, this wasn’t surprising.

If you booked a scooter before your wedding, you had school-going kids by the time your scooter arrived. And things got worse before they got better – by the end of the decade the waiting period had increased to 10 years.

Test Of Patience

Buying a scooter in the 1970s was a test of patience. It started with you writing an application to the dealer. Then you went to a post office, opened a savings account and made a security deposit of Rs 250. The post office gave you a passbook, which you submitted to the scooter dealer as proof of intent to purchase.

And then the long wait started. When your turn came after 7, 8 or 10 years, the dealer returned the passbook and “authorised” you to withdraw your Rs 250 to make the full payment. To check blackmarketing, you weren’t allowed to sell your new scooter in the first year of purchase without the state transport commissioner’s permission.

This procedure had been laid down in a 10-year-old rule called ‘Scooters (Distribution and Sale) Control Order, 1960.’

Shifting Goalposts

The scooter shortage had been building up over the years, and the only way out of it was to increase production, but the government’s policies and attitude made it difficult. 

Those days, any project that needed an investment of more than Rs 10 lakh in foreign exchange had to be cleared by the ministry for Industrial Development, Internal Trade and Company Affairs. In 1965–66, many industrialists had applied for permission to set up scooter factories in India, but the ministry sat on their applications.

Eventually, all of those private proposals were scrapped and the government came up with a new rule allowing private companies to make scooters only if they did so “without foreign technical know-how and without foreign assistance.” 

How was somebody with zero experience of automobile manufacturing to make a scooter without a technology tie-up? This rule was unfair also because Automobile Products of India (API) and Bajaj Auto had been making Lambretta and Vespa scooters, respectively, with foreign know-how, for years. And their components were still not fully localised. But the government said their licences were up for renewal in less than a year, after which they would be expected to make every part in India.

Despite this near-impossible condition of indigenous design and production, private businesses responded enthusiastically. By February 1970, there were 31 proposals before the government, but once again it sat on them. In May that year, then industries minister (later President of India) Fakhruddin Ali Ahmed said, “Within six months some decision will be taken.”

Scooters India Fiasco

But the decision that followed surprised everybody. The government announced it would set up its own scooter company “with indigenous know-how”. On May 11, 1970, Ahmed said in Parliament: “Jo public sector mein karkhana lagaya jayega, vah bhi yahin ke maal ke upar lagaya jayega jo ki hamare mulk mein banaya ja raha hai (all equipment used in the government scooter factory will be fully indigenous).”

For two years the government did nothing, and then, proving the absurdity of its own policy, it went and bought Italian scooter-maker Innocenti’s factory in Milan for $1.85 million (Rs 1.5 crore in those days at an exchange rate of about Rs 8 to a US dollar). It bought the “entire plant along with all auxiliaries as well as the technical know-how, including worldwide trademark and export rights… of M/s Innocenti, owners of the Lambretta brand”.

The government admitted that bringing a scooter to market from the drawing-board stage would have taken 7-8 years, so an outright purchase was the wiser option. It promised to make 1 lakh scooters every year to shorten the waiting lists. But that was wishful thinking as the first scooter from the government-owned company – Scooters India Limited – was not expected to roll out for at least two years.

Besides, in correcting one mistake the government had made another. It had sunk its money in a scooter that had lost the race to Vespa globally and was a distant second choice in India. As against 84,883 pending Lambretta bookings on March 31, 1970, there were 176,933 bookings for Vespa scooters. So Scooters India Limited never ran to capacity even in those shortage years. Instead, it ran up huge losses before it went bust. 

Queues Grew Longer

Meanwhile, the waiting period for a scooter went on increasing. A study group of the government’s Planning Commission estimated that 2.1 lakh scooters would be needed in 1973–74. The think tank National Council of Applied Economic Research (NCAER) said annual demand would increase to 243,000 scooters within eight years, by 1979–80. But yearly scooter production in 1971 was less than 70,000 units.

Once again, government policies were holding back production. API and Bajaj were allowed to make only 50,000 scooters each. When they  applied for permission to increase production capacity to 100,000 units each per annum, the government started reviewing their applications under the Monopolies and Restrictive Trade Practices Act.

As for the new companies that wanted to get into scooter manufacturing, the government told them it would grant licences based on “what price they are going to charge the consumer and whether they can efficiently manufacture the scooter or not”.

But the new licensees would also have faced the production cap of 50,000 scooters per annum, making it difficult for them to compete with API and Bajaj on price. So, the new suitors dispersed, Scooters India Limited disappointed, and the waiting period for a scooter in India gradually increased to 10 years.

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How airbags transformed from a feared device to a must-have

 

On November 28, 1996, a ghastly accident occurred in the US state of Idaho. A woman drove her car into the back of another car. Her one-year-old daughter, Alexandra, who was in the front passenger seat beside her, was decapitated. Her head was thrown “through the door window and into the parking lot,” news agency AP reported.

But it was not a high-speed crash. The two cars were inside a mall parking lot. The culprit was the passenger airbag in Alexandra’s mother’s car, which had expanded with its full force at 320 kmph.

By April 1997, airbags that were meant to save lives had killed 63 Americans, of whom 38 were children. Alexandra’s case was the goriest, but all were equally tragic. The American public was scared. Some 35 million cars and light trucks already had airbags, and from September 1, 1997, front airbags were going to be mandatory across America. There was a clamour for a switch to disable airbags.

Yet, here we are 25 years later when the number of airbags in a car is considered a measure of safety. People want airbags, and transport minister Nitin Gadkari is pushing carmakers to oblige. So, how did the once-feared airbag become a must-have? Let’s rewind 50 years.

Cushion for the careless

We now see airbags as the primary safety device in a car, but 50 years ago that was not the case. The seat belt was, and perhaps still is, the single most important safety device in your car. Although seat belts in the 1960s and 1970s were basic lap belts (there was no strap across the shoulder), they did save lives.

As Ford’s executive vice-president Fred Secrest told a US Senate Committee hearing on August 1, 1973: belts alone were more effective than airbags “primarily because belts keep people from being thrown out of the car…. The chances of an occupant being killed in an accident are four times greater if the occupant is ejected from the car.”

A front airbag only protected the occupant from injuries that occurred due to impact on the steering wheel and the windshield, but a three-point belt (shoulder+lap) was just as good. Secrest said: “The airbag was intended to be a superior crash pad, to reduce the severity of the second collision impact of a lapbelted occupant in a frontal collision.”

So, why were automobile companies spending millions of dollars developing airbags, and why was the Senate committee so eager to see them installed in cars?

The problem was, although cars came fitted with belts people didn’t use them. In 1972, just 20% of American car users wore seat belts even though 38,000 car occupants had been killed and 3.5 million injured in crashes that year. Wearing a seat belt was not compulsory, and imposing a countrywide seat belt rule was politically difficult.

That’s why lawmakers were keen to have a “passive restraint system” that would protect careless car occupants in a crash. Insurance firm Allstate’s director of automotive engineering, Jack Martens, told the committee, “The airbag is a device that works in spite of occupant apathy.”

The insurance industry said 66% of accidents were front-end collisions, and 89% of accident deaths occurred in the front seats. So, the focus was on providing front airbags. In fact, a rule to make airbags mandatory in all cars sold in the US after August 15, 1975 was announced but it was stalled by a court over doubts regarding the design of crash dummies used to test airbags.

Lifesaver from the start

Nonetheless, carmakers had extensively tested airbags by 1973. About 2,000 GM and Ford cars had covered 55 million kilometres between them, and there had been 12 crashes in which their airbags had deployed. The results were largely excellent. In one case, a Mercury (Ford) driver had driven into the back of a parked car at 109kmph without a seat belt. He had slid forward in his seat and fractured his knee but was unharmed otherwise.

A minor girl had driven her car into a railway sign. The impact had broken the engine mountings but the girl and her friend had walked away from the crash unharmed.

It won’t be allowed today but some of the early airbag testing was done using baboons in place of dummies. And to ensure that the gas that inflated the airbag was not toxic, monkeys were exposed to it in a sealed space for 30 minutes.

Though the airbags performed well, they were very much a work in progress. There were doubts about their reliability in very cold places like Alaska, and concerns about permanent hearing loss from their explosive deployment. But all the testers who had been in an accident said they had never heard the bag deploy as the crash itself had been louder.

So, how did the ‘benign’ airbags of the early 1970s turn into somewhat dangerous and unpredictable devices by the 1990s?

Powerful to a fault

Well, this was a result of trying to protect occupants who did not wear belts. US guidelines at the time required that airbags should be able to protect an “average adult male not wearing a seat belt”. But the average US male was heavy. The current figure is about 200 pounds or 90kg.

To stop a heavy man from crashing into the steering wheel during an accident, the airbag had to deploy with great force. At the 1973 Senate committee hearing Ronald H Haas from GM’s Oldsmobile division had said that in a 50kmph crash, the time available to deploy was 0.04 seconds, or one twenty-fifth of a second.

The force was simply too much for lighter people, such as children and old women. While airbags were saving lives, they were known to sometimes cause arm fractures in drivers. If the car wasn’t moving fast, and the occupant’s body did not have enough forward momentum, the airbag “punched” their head backward with too much force. This could cause injuries to the face and the head, and also make the neck snap backwards. That’s how little Alexandra Greer had been decapitated.

The good news was that by the mid-1990s seat belt use had risen across the US, so experts advised depowering airbags by 20-35%. Another suggestion was to improve the way airbags were folded and tucked into the steering and the dashboard. The unravelling folds could be used to direct an airbag’s force away from the occupant.

Advanced sensors that could detect the speed of the vehicle, the size and weight of an occupant, and whether they were belted or not, also helped in making airbags safer with time.

A boon despite flaws

The airbag is still not perfect, and unlike a seat belt you can’t find out how good it is till you have an accident. And even if engineers develop the perfect airbag, the possibility of manufacturing defects can’t be wished away.

The Takata airbag recall that started in 2016 affects 67 million airbags in 42 million vehicles and is still not complete. These airbags sometimes malfunction in hot and humid conditions, especially when they are old. They contain an ammonium-nitrate-based propellant that can ignite spontaneously, sending metal shards from the airbag flying around the cabin.

At last count, faulty Takata airbags had killed at least 27 people worldwide since 2002, according to Consumer Reports. But on the other hand, airbags have saved at least 50,000 lives since 1987 in the US alone. So, on balance, the airbag is a device that you would rather have in your car.

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Why India was a 3-car country for 30 years

Maruti 800 was to India what Model T had been to America in the early 1900s, and the Fiat 500 to Europe in the post-War years. It was at the right place at the right time and the right price.

Before the 800 arrived, for 30 years India had only three cars: Hindustan Ambassador, Premier Padmini and Standard Herald. Was it love? What explains the Indian people’s surprising constancy to these cars?

Government policy. Those cars were not the best fit for India, not in the 1980s, nor in 1950s. Fans vouch for the sturdiness of their frames and the forgiving nature of their engines, but any other car from the 1950s would have done just as well.

Point is, why did India start with these three mid-size cars instead of something smaller like the 500 or the Mini that would have been cheaper and got Indian car manufacturing to shift into high gear 30 years early?

Case for ‘Baby’ Cars

The government was not blind to the need for smaller and cheaper cars. Many members of Parliament had pointed out that the existing cars, priced around Rs 10,000 each in 1957, were too expensive for the middle class, and new models in the Rs 5,000–6,000 range were needed.

This is what then industries minister Manubhai Shah had to say about ‘baby’ cars on November 20, 1957: “That can be a real average middle-class family car, particularly for urban use…Undoubtedly the lighter cars are wanted in the interest of the consumer public, particularly the middle-class families in the urban areas.”

Policy Block

But the smaller people-movers did not materialise until Suzuki set up shop in India 30 years later. For a brief period, Hindustan Motors sold a smaller car called Baby Hindustan  — “already licensed as far as the manufacturing programme is concerned, but we have not encouraged its large-scale manufacture.”

Why didn’t the government encourage smaller cars? The answer lies in independent India’s well-intentioned but counterproductive early manufacturing policies.

Back in 1953, an advisory body called Tariff Commission recommended that “the manufacture of automobiles should be restricted to a few firms.” The motive was to transform India into a manufacturing country. If only a few car models were allowed, each one of them would sell in larger numbers, bringing economies of scale to encourage local manufacturing.

In fact, before Independence in 1947 and for the first few years afterwards, about three dozen models of cars and altogether 4-5 dozen models of automobiles were sold in India.

The government responded to the 1953 recommendations by allowing only six firms to manufacture selected types of vehicles, including cars, trucks and jeeps. How were these six firms picked? The government called for manufacturing programmes from industrialists, and from those who applied, it approved six.

Before full manufacturing could begin, the government imposed restrictions on the assemblers to import only three types of cars and trucks. Three years later, in 1956, the Commission came back with even stronger advice:

“We should give priority to the manufacture of commercial vehicles rather than passenger cars.”

“It would be definitely undesirable to introduce any more passenger cars for manufacture in the country.”

The Economic Weekly of March 2, 1957 criticised this approach because no thought was given to the type of car India needed most: “The Tariff Commission has had to accept the situation as it was and give its approval to the manufacture of cars for which sponsors were already available. A selection on the basis of first-come, first-served, without looking into the capacity of these cars to suit Indian conditions.”

Dogmatic Attitude

The government went along with the Commission’s advice.

“The government has decided that as far as passenger cars are concerned, the manufacturing units should concentrate on Hindustan Landmaster (later Hindustan Ambassador), Fiat 1100 and Standard Vanguard. Also Standard 10, which is of a lighter variety than the above three models, is being manufactured in sizeable numbers. Until and unless these models go into production in sufficient numbers and also with the requisite percentage of indigenous components to a satisfactory limit, it is the policy of the government not to permit any further models in the passenger cars,” Manubhai Shah said while moving the Indian Tariff (Amendment) Bill, 1957.

Mark the word ‘satisfactory’. Whose satisfaction?

“…in the opinion of the government to produce to the entire satisfaction of the government,” said Shah.

He dismissed the question of promoting compact cars: “We have not encouraged its (Baby Hindustan’s) large-scale manufacture and we would not encourage its large-scale manufacture unless and until the Hindustan Ambassador comes out in a satisfactory way in all respects.”

The government clung to that policy. “We would rather concentrate on the existing models.” Years passed, governments changed but for three decades, India continued to focus on those three initial car models.

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