Environmental Disaster: “GM is Banking On China and India To Drive Growth”
They are some of the fastest growing markets in the world and as Thomas Friedman writes in “Power of Green” (see here for post), if they copy western consumption patterns they are likely to compound our current drive to destroy the environment. Yet, as today’s WSJ writes in “GM is Banking on China and India to Drive Growth” (Note: the title was later changed to “GM Retrenches in Europe, Shifts Gaze East”) to car companies, China and India are nothing more than the biggest untapped markets in the world.
Having recently been to both China and India, I feel very comfortable saying that of the many things these countries need, cars are not one of them. If anything, India and China need less cars and more alternate modes of transportation. After finishing my days travelling Delhi with black snot, after near-death incidents on country roads, and after suffering endless traffic jams and contamination in Beijing, it is appalling to think that we will continue to sell a car culture without being horrified.
Rick Wagoner, GM’s CEO, says, “We think, within a decade, India will emerge as the second-fastest growing automotive market in the world.” I can imagine Mr. Wagoner smiling as he says this.
Additionally, GM China President Kevin Wale says that by 2020, China will be the single biggest car market in the world.
As the WSJ reports, “The main goal of GMs emerging-markets strategy is to gain revenue and profit. But the rapid moves to bulk up capacity and sales in Asia could also help GM to fend off Toyota’s challenge to GM’s six-decade reign as the world’s No. 1 car maker.” In the entire article, the environmental damage from a more vibrant car industry is not mentioned once.
After countless developing countries around the world copied the car culture of the United States and in doing so, obtained the corresponding transportation and environmental issues, it is ridiculous that the car companies can push their product so unashamedly. As Thomas Friedman writes, if current patterns of growth continues (and GM hopes they do), the results will be catastrophic:
“China currently has only one car for every 100 people, but [...] as it reaches American income levels, if it copies American consumption, it will have three cars for every four people, or 1.1 billion vehicles. The total world fleet today is 800 million vehicles!”
Who are you to tell the emerging middle classes in these countries that they shouldn’t buy or drive cars? For all of the ills of a car culture, it also provides a tremendous amount of freedom to individuals and changes the nature of urban societies. While you may disagree with many of these changes, there is no compelling moral or structural argument against them.
The environmental argument is more compelling. However, the car industry itself has no obligation toward the environment. That is the kind of external social cost that governments exist to address. It’s also worth mentioning that both these countries have better fuel economies than the United States does.
Gaurav
April 22, 2007 at 11:21 pm