(Source: NPR’s Talk of the Nation)

This evening I was listening to an interesting piece (click here to listen to the audio) on NPR’s Talk of the Nation hosted by Neal Conan.  The program’s guest was Chris Steiner, author of this book: $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better, who says our lives would be a lot happier and healthier if gas prices rose into the double digits.

Image Courtesy: NPR

Last year, gas prices soared over four dollars a gallon and Americans responded by driving a hundred billion fewer miles than the year before. Right now, at $2.50 a gallon or so, things seem back to normal. But writer Christopher Steiner argues that’s a delusion. He thinks we need to prepare for life at six, 10, even 20 dollars a gallon, prices which will change a lot more than our driving habits. They will transform what we eat, where we live, and how we view the world. And while there will be losers, he believes the airline industry will largely disappear, for example, for the most part, he asserts our lives will be better.

The following excerpt from his book paints a scary (and also good) picture:  Many people, quite understandably, don’t consider the implications of expensive gasoline so grand. The fact remains that the price of oil will inevitably rise, however. Two simple factors are responsible: first, we’re running out of oil (albeit slowly) and second, world demand will continue to rise for decades. We use six barrels of oil for every one we find. Half of the world’s petroleum comes from 3% of its oil fields — and those fields are old. The average age of the world’s 14 largest oil fields: 50 years, the exact age when most fields’ productions start an irreversible ebb. On the demand side, consider this: There are 1 billion people on the globe living what would be considered an American-style life, including ourselves. By 2040, that number will triple. The world’s burgeoning middle class will demand oil and it will get oil. Steady price increases are academic. Economics 101: Supply down, Demand up = higher prices.

The changes to our society will begin at $6 per gallon and continue on from there, affecting things far beyond the kinds of cars we drive and how often we drive them. America’s obesity rate will fall. Mass transit will spread across the country. Plane graveyards will overflow. We’ll lose the option to cheaply travel by plane, but high-speed train networks will slowly snake state to state. Disneyworld will lock its gates, Las Vegas’ strip will shrink to half its size. Our air will be cleaner. Cities like Detroit, St. Louis, Pittsburgh and Milwaukee will revive at $12 per gallon, their streets rife with commerce, people and stores. The exurbs of America, where we’ve poured so much of our wealth during the last several decades, will atrophy, destroying the equity of those who held fast. Wal-Mart will go bankrupt at $14 per gallon and manufacturing jobs will return to the U.S. en masse. When gas reaches $16 per gallon, Michael Pollan will get the food world he lobbies for in The Omnivore’s Dilemma.

Recently, NY Times has also reviewed Mr. Steiner’s work.  Writing about this NY Times review on his blog, Mr. Steiner says ” The Times neither praised the book nor panned it. The review proceeded as cautious and as neutral as would seem possible, with a bit of skepticism tossed in. It was reviewed in the Business Section, however, not in Styles or Books, so that may explain the stern pragmatism of the reviewer.”

Here is an excerpt from NY Times review:  “The book’s arguments are sometimes overstated in hyperbolic prose. In the chapter about the end of the airline industry as we know it, it says that some companies will be “permanently torpedoed” by high gas prices. It warns that a “giant herd of people” will lose their jobs. And it says that our grandchildren will “undoubtedly gawp in awe” when we recount our childhood trips to Disneyland. Well, that’s something to look forward to in our old age.”

If you are one of  those people who have already read his book, let us know what do you think.  Worth a buy??

Click here to read the entire transcript from this interview.

Image Courtesy: USDOT

(Source: USDOT Press Release)

U.S. Transportation Secretary Ray LaHood today announced the agenda  for the Distracted Driving Summit on Tuesday (shown below), September 30 and Wednesday, October 1. Over 200 safety experts, researchers, elected officials and members of the public will gather in Washington, D.C. to share their experiences, provide feedback and develop recommendations for reducing the growing safety risk that distracted driving is imposing on our nation’s roads.

The Distracted Driving Summit will bring together respected leaders from around the country for interactive sessions on the extent and impact of the problem, current research, regulations, best practices and other key topics. The two day Summit will feature five panels – on data, research, technology, policy, and outreach – with a range of experts discussing each topic.

• The Summit will begin with a context setting panel where participants will examine the scope of the issue and the various distractions that exist, followed by a panel that will review currently available research.
• Day one wraps up with an examination of distractions caused by technology and efforts made to assess and reduce negative effects caused by current and planned devices. Panelists will also consider technology that can prevent the consequences of driver distraction.
• Day two features a review of legislative and regulatory approaches for dealing with distracted driving; evaluations of the impact of such measures; and enforcement issues. Members of Congress and their staff will also have the opportunity to contribute to the discussion.
• Day two concludes with a discussion with teens about their experiences with distracted driving followed by an examination of various public awareness initiatives and research regarding the effectiveness of these efforts.

To accommodate the strong response, the Summit will be available live by webcast and members of the public will be given the opportunity to submit questions online for each individual panel discussion. The complete agenda and additional information about the Summit can be found at http://www.rita.dot.gov/distracted_driving_Summit/ .  Also, you can follow the latest developments via twitter @ distractdriving

————————————————————————————————————————————

Distracted Driving Summit
September 30 – October 1, 2009
Renaissance Hotel, 999 9th Street NW, Washington, DC

Agenda Is Subject to Change

Wednesday, September 30

DOT Welcome and Summit Opening
Peter Appel, Administrator
Research and Innovative Technology Administration

Opening Address
Ray LaHood, U.S. Secretary of Transportation

Panel: Driver Distractions and Inattention – Definitions and Data
A context-setting panel on the definition of distracted driving (what it is and what it is not), data on the extent of the issue, the types of distractions across surface modes of transportation.

Moderator:       Victor Mendez, Administrator, Federal Highway Administration

Speaker:           Dr. John D. Lee, Professor, Department of Industrial and Systems Engineering, University of Wisconsin-Madison
Speaker:           Kristin Backstrom, Senior Manager, AAA Foundation for Traffic Safety
Speaker:           John Inglish, General Manager, Utah Transit Authority
Speaker:           Bruce Magladry, Director, Office of Highway Safety, National Transportation Safety Board

Panel: Research Results – How Risky is Distracted Driving?

This panel session will review what various research – experimental research, industry self reporting, collision studies, and observational studies– tell us about the nature of the problem of distracted driving.

Moderator:       Rose McMurray, Acting Deputy Administrator, Federal Motor Carrier Safety Administration

Speaker:           Dr. Ann Dellinger, Lead, Motor Vehicle Injury Prevention Team,
Centers for Disease Control and Prevention, National Center of  Injury Prevention and Control
Speaker:           Dr. Tom Dingus, Director, Virginia Tech Transportation Institute
Speaker:           Dr. William Horrey, Chair, Surface Transportation Technical Group,
Human Factors and Ergonomics Society and Research Scientist,
Center for Behavioral Sciences, Liberty Mutual Research Institute for Safety
Speaker:           Dr. Key Dismukes, Chief Scientist, Human Systems Integration
Division, National Aeronautics and Space Administration Ames Research Center

Panel: Technology and Distracted Driving
This panel will focus on distractions caused by technology and on efforts that have been made (or are needed) to assess and reduce the negative impact of distractions caused by current and planned devices.  It will also consider technology that can prevent the consequences of distraction.

Moderator:       Peter Appel, Administrator, Research and Innovative Technology Administration

Speaker:           Dr. David Eby, Research Associate Professor and Head, Social
and Behavioral Analysis, University of Michigan Transportation Research Institute
Speaker:           Rob Strassburger, Vice President, Alliance of Automobile Manufacturers
Speaker:           Steve Largent, President and Chief Executive Officer, International Association
for Wireless Telecommunications Industry
Speaker:           Michael Petricone, Senior Vice President, Government Affairs, Consumer Electronics Association
Speaker:           Rod MacKenzie, Chief Technology Officer and Vice President of
Programs, Intelligent Transportation Society of America

Thursday, October 1

Congressional Presentation

Panel: Legislation, Regulation and Enforcement of Distracted Driving
This panel session will review legislative and regulatory approaches for addressing distracted driving; evaluations of the impact of such measures; enforcement issues; and public attitudes towards the issue.

Moderator:       Peter Rogoff, Administrator, Federal Transit Administration

Speaker:           John D’Amico, Representative, Illinois General Assembly
Speaker:           Bruce Starr, Senator, Oregon Senate and Executive Committee Member of the National Conference
of State Legislatures
Speaker:           Steve Farley, Representative, Arizona House of Representatives
Speaker:           Major David Salmon, Director, Traffic Services Division, New York State Police
Speaker:           Vernon Betkey, Chairman, Governors Highway Safety Association
and Director of the Maryland Highway Safety Office

Youth Program

Panel: Public Awareness and Education
This panel will review initiatives to increase public awareness of safety issues such as distracted driving, and will review research regarding the effectiveness of such efforts.

Moderator: Ron Medford, Acting Deputy Administrator, National Highway Traffic Safety Administration

Speaker:           Sandy Spavone, Executive Director, National Organization for Youth Safety
Speaker:           Chuck Hurley, Executive Director and Chief Executive Officer,  Mothers Against Drunk Driving
Speaker:           Ann Shoket, Editor-in-Chief, Seventeen Magazine
Speaker:           Janet Froetscher, President and Chief Executive Officer, National Safety Council
Speaker:           Dr. Adrian Lund, President, Insurance Institute for Highway Safety

Secretary LaHood
Closing Remarks and Action Plan

(Source: New York Times)

The Obama administration issued proposed rules on Tuesday that impose the first nationwide limits on greenhouse gas emissions from vehicles and that require American cars and light truck fleet to meet a fuel efficiency standard of 35.5 miles a gallon by 2016.

The government projects that the regulations will raise car and truck prices by an average of $1,100, but that drivers will save $3,000 over the life of the vehicle in lower fuel bills. Officials also said the new program, which is to take effect in 2012, would reduce carbon dioxide emissions by nearly a billion tons and cut oil consumption by 1.8 billion barrels from 2012 to 2016.

The 1,227-page regulation will go through a 60-day public comment period before it is completed early next year.

(Source: Wall Street Journal)

Today’s WSJ had a nice article about the Korean Automaker, explaining what makes it a successful car in the US.   Worth a read..

….The leading Korean car company’s name rhymes with the first day of the week, as in “Hyundai, Bloody Hyundai.” Which is pretty much what the company’s competitors are saying to themselves these days about Hyundai’s remarkable success over the past few years.

Last year Hyundai’s global sales bucked the industry’s decline and rose 5% to 4.2 million cars and trucks. Even in the U.S., the world’s most competitive car market, Hyundai’s sales rose 0.8% in the first eight months of this year, while Ford’s sales dropped 25% in the same period and GM’s plunged 35%. The major Japanese auto makers suffered declines between 25% and 30%.

Hyundai’s success stems from a sustained corporate effort at reinvention—the very same word General Motors is using to describe its mission these days. The Hyundai story should provide GM with a road map.

For years, Hyundai enjoyed a protected home market in Korea. This ensured its prosperity there, but the lack of competition meant the company didn’t develop the product quality or consistency to compete effectively in international markets. The result: Hyundai’s initial U.S. success in 1986 was undercut quickly by quality problems.

A decade ago, Hyundai acquired Kia, a victim of a mid-1990s shakeout in the Korean auto industry. It also established a new quality-control division charged with boosting reliability by emulating Toyota’s vaunted manufacturing methods. To allay lingering concerns over quality, Hyundai put warranties of 10 years or 100,000 miles on vehicles sold in America.

Their campaign began to show results, and the big breakthrough came in 2004, when Hyundai tied Honda for second place in the prestigious J.D. Power & Co. Initial Quality Survey. Also that year, Hyundai completed its first U.S. assembly plant, near Montgomery, Ala.

On the marketing front, last January the Hyundai division launched an innovative “Assurance Program” in the U.S.: Buyers return their cars if they lose their job within a year after their purchase. The offer generated buzz and resonated with the public, as Hyundai’s recent U.S. sales results demonstrate, even though buyers have turned in fewer than 50 cars under the program, which continues through year-end.

…..Both U.S. companies will have to make their marketing more relevant. Hyundai’s 10-year warranties and the “Assurance Program” succeeded because they addressed specific customer concerns—the former about the brand’s reliability, the latter about the economic environment…….

Click here to read the entire article.

(Source: FHWA Office of Planning, Environment and Realty)

(Sources contributing to this hybrid report: Marketwatch; Associated Press Washington Post; &  CNN)

President Barack Obama signed an order on Friday to impose the special punitive tariffs for three years, the White House announced.   The action is the first major trade enforcement action of his presidency and comes less than two weeks before a high-profile summit of the leaders of the Group of 20 nations, including China.

It is the first time the U.S. government has imposed special “safeguard” provisions to protect a U.S. industry from Chinese competition..

“The president decided to remedy the clear disruption to the U.S. tire industry based on the facts and the law in this case,” White House spokesman Robert Gibbs said in a statement.

Obama had until this coming Thursday to accept, reject or modify a U.S. International Trade Commission ruling that a rising tide of Chinese tires into the U.S. hurts American producers. The United Steelworkers blames the increase for the loss of thousands of American jobs.

The federal trade panel recommended a 55 percent tariff in the first year, 45 percent in the second year and 35 percent in the third year. Obama settled on 35 percent the first year, 30 percent in the second and 25 percent in the third, White House press secretary Robert Gibbs said. The tariff would be on top of the current 4% tariff. The tariffs will take effect in 15 days.

U.S. imports of Chinese tires have risen from 14.6 million in 2004 to 46 million last year, accounting for about one-sixth of the U.S. market. Four U.S. tire plants have closed in the past two years, and more than 5,000 workers have lost their jobs.

President Barack Obama’s decision to impose trade penalties on Chinese tires has infuriated Beijing at a time when the U.S. badly needs Chinese help on climate change, nuclear standoffs with Iran and North Korea and the global economy.

The decision comes as U.S. officials are working with the Chinese and other nations to plan an economic summit in Pittsburgh on Sept. 24-25 of the 20 leading rich and developing nations. China will be a major presence at the meeting, and the United States will be eager to show it supports free trade.

Governments around the world have suggested the U.S. talks tough against protectionism only when its own industries are not threatened. U.S. rhetoric on free trade also has been questioned because of a “Buy American” provision in the U.S. stimulus package.

China condemned the White House’s announcement late Friday as protectionist and said it violated global trade rules. At home, the punitive tariffs on all car and light truck tires coming into the U.S. from China may placate union supporters who are important to the president’s health care push.

Chen Deming, China’s minister of commerce, said the penalties would hurt relations with the U.S. A ministry statement said Obama had “compromised to the political pressure of the U.S. domestic trade protectionism.”  “The Chinese government will continue to uphold the legitimate interests of China’s domestic industry and has the right to take corresponding measures,” Deming said.

For the Chinese government, the tire dispute threatens an economic relationship crucial to China’s economic growth. There was speculation before the decision that new tariffs could produce public pressure on Beijing to retaliate, potentially leading to a trade war.  Chinese leaders have in the past expressed displeasure about a possible tire tariff.

“We hope the U.S. government will refrain from taking action, for the long-term healthy and stable development of U.S.-Chinese relations,” Fu Ziying, China’s vice commerce minister, told local media in August.

China’s Ministry of Commerce said in a statement early Saturday that the move violated WTO rules. “China strongly opposes this serious act of trade protectionism by the U.S,” the ministry said, according to the Associated Press.

China agreed to the provision while negotiating to join the World Trade Organization, but until Friday the general “safeguard” provisions of the law had never been invoked.  Critics warned that if the general “safeguard,” which expires in four years, was never used to protect American workers from Chinese imports, then political support for free trade would be eroded.

“Since China joined the WTO, American workers have not been assured that the government would defend them against unfair trade,” Sen. Sherrod Brown (D-Ohio) said.  The tariff, which will take effect Sept. 26, represents the first such case under the law for Obama, and his decision has been highly anticipated.

During the campaign, he had pledged to “crack down on China” and “work to ensure that China is no longer given a free pass to undermine U.S. workers,” as his Web site put it.

The tariff’s detractors said higher tire prices could lead some consumers to wait longer before replacing tires, creating a safety risk. Moreover, they said, the tariff won’t result in more jobs. Tires will simply come in from other low-cost countries, they say, and U.S. manufacturers, keep making their cheaper tires in China.

“U.S. tire manufacturers years ago decided to move production of low end tires off-shore,” said David Spooner, a lawyer representing the Chinese tire industry. “Frankly, a temporary tariff is not going to get them to change their business plan.”

Click here to read the entire article.

(Source: Mail Online, UK)

Today the Daily Mail demands action against the menace of cowboy wheel clampers.

The industry rakes in almost £1billion a year from motorists parked on private land and has been described as ‘legalised mugging’.

Clampers routinely charge £500 penalties, tow away cars, prey on the vulnerable and are often paid on commission, encouraging them to immobilise as many vehicles as possible. But despite the extraordinary power they wield, those working on private land in England and Wales are completely unregulated and their victims have no right of independent appeal.

The Mail, supported by motoring groups and MPs, is calling for an end to this unfairness by bringing the law for parking on private land in line with that for public roads, including the introduction of a maximum limit for penalties.

Image Courtesy: Mail Online - Suggested legislative changes to curb the growing clamping problem

Experts say the major flaw in the current regime is that the company which issued the penalty in the first place is allowed to act as judge and jury in the case – unlike on public roads, where an appeal can be made to an independent tribunal.

The clampers can charge whatever they like and are even allowed to exploit the Government’s supposedly confidential DVLA database to find drivers’ names and addresses at £2.50 a time.

It has led to clamping becoming a boom industry. Between March 2008 and April 2009, the number of licensed clampers rocketed by a staggering 58 per cent – from 1,200 to 1,900.

Instead, when ministers publish their clamping Bill later this year, the Mail calls for the legislation to include:

• An independent tribunal to hear appeals by motorists who are clamped on private land.

• Maximum penalties for infringements on private land to be brought in line with those on private road.

• A ban on towing away a vehicle unless it is posing a danger, blocking access or has been abandoned.

• Prohibition of offering incentives to private clampers, based on how many motorists are issued with penalty charges.

Click here to read the entire article.

(Source: Green Car Congress)

Daimler AG and leading energy companies signed a Memorandum of Understanding (MoU) in Berlin, with the participation of the German Minister of Transport, Wolfgang Tiefensee, to evaluate and expand the setup of a hydrogen infrastructure in Germany to support the series production of fuel cell electric vehicles. In addition to Daimler, partners in the “H2 Mobility” initiative include EnBW, Linde, OMV, Shell, Total, Vattenfall and the NOW GmbH (National Organization Hydrogen and Fuel Cell Technology). The project is open for other interested partners.

The H2 Mobility launch comes one day after leading automakers signed a Letter of Understanding regarding the commercialization and series production of fuel cell electric vehicles from 2015 onward. Noting the importance of a hydrogen infrastructure with sufficient density, the automakers—Daimler, Ford, GM/Opel, Honda, Hyundai, Kia, Renault Nissan Alliance, and Toyota—in that LoU strongly supported building up a hydrogen infrastructure in Europe, with Germany as regional starting point, among other global starting points. (Earlier post.)

The H2 Mobility partners noted that significant progress has been made in Germany in recent years with the development of hydrogen based technologies in the mobility sector, marking the country as a potential start-market in the context of a broader European perspective.

The German government is also developing a plan to provide financial incentives starting in 2012 to support the production and sale of 100,000 electric cars annually. The plan envisages around one million electric cars on German roads by 2020. (Earlier post.)

Germany already has a leading position regarding the hydrogen infrastructure in Europe, with initial hydrogen centers having been established in urban agglomerations such as Berlin and Hamburg. Seven of the current thirty hydrogen fueling stations in Germany are integrated into public gas stations. Already five to ten hydrogen fuelling stations can secure a first supply in a major city. The partnership envisions connecting those urban agglomerations with supply corridors on main arteries to establish the essential prerequisites for nationwide development.

A fleet of 40 hydrogen vehicles is part of the Clean Energy Partnership (CEP) in Berlin and Hamburg. The CEP is aiming to demonstrate the suitability for daily use of hydrogen as an alternative fuel for vehicles and to test the infrastructure of hydrogen fuelling stations.

Since 1994, Daimler has invested more than €1 billion (US$1.5 billion) in the development of fuel cells. With more than 100 test vehicles and more than 4.5 million kilometers of test runs in total, Daimler has one of the largest fuel-cell vehicle fleets of passenger cars and buses worldwide.

Click here to read the entire article.

TransportGooru Musings: Germany is not the only European nation that has showed some love for hydrogen vehicles.   Norway is the other frontrunner in the hydrogen fuel economy and has made noteworthy investments (learn about Norway’s initiatives in building a hydrogen refueling infrastructure here).  As more nations are exploring the possibilities of hydrogen fuel vehicles in the future, the United States seem to think the other way.   The funding for hydrogen fuel vehicles has been cut down significantly in past years and that has put the program on life support.

If I wear my “forecaster” hat for a minute, I see in the near future a big jump in the number of electric hybrid vehicles flooding the market.   The long range perspective is a bit more of a mix – both hydrogen and electric vehicles equally mixed.  Now, this short term projection is causing a bit of a concern for some due to the fact that the current battery technology is not the best to sustain our energy needs for uninterrupted transportation. Some of them battery research is evolving  in directions that can eat up some of teh precious mineral reserves.  For example, the Lithium reserves in Bolivia (supposedly the largest in the world) would become the equivalent of today’s oil and the battery manufacturers might inadvertantly create a new monster in their quest for batteries that can hold charger for an extended period of time.  We do not want to create another OPEC that meddles with the price of our minerals market.   I read somewhere that China has already banned the export of some precious minerals which are used in battery reserach and has clearly shown its interest in siphoning off these resources for its domestic markets.  At some point in time we may need an alternative to our current Lithium ion battery tech and the only other tech that is promisingly clean and relatively cheaper is hydrogen.  That said, we can continue to argue about the economics and cost/benefits of H2 Vehicle vs Electric vehicle tech, but such arguments become pointless when we consider the cost of social problems (such as war/fight over natural resources, etc).   To avoid getting trapped into another mono-fuel model (i.e., electric or electric-hybrid, which anyway doesn’t fully fit into his mono-fuel model) like we are locked in now, the Government of United States should continue to invest in developing a viable hydrogen fuel technology that can equally compete with electric or electric-hybrid vehicles in terms of afforadability and efficiency.

The Hilton St. Louis at the Ballpark

1 South Broadway, St. Louis, MO 63102

IBTTA and ITS America Join Forces on Sustainable Transportation and Facility Maintenance

Register today for this groundbreaking joint conference, Sustainability, Social Responsibility, Energy Conservation and Fall Maintenance, October 4-6, 2009 at the Hilton Hotel in St. Louis.

Agenda highlights include:

• Congressman (MO-3rd) Russ Carnahan;
• “Four Legs” of Sustainable Transportation presented by John Charles, President & CEO, Cascade Policy Institute and his expert panel, including Allen Biehler, President of AASHTO and Michael Replogle, Global Policy Director of ITDP;
• Dennis Archer, Chairman, Dickinson Wright, PLLC, and Former Mayor of Detroit will discuss the role of the federal government in promoting sustainable transportation policies for metropolitan areas;
• Views of the FHWA and the US DOT ITS Joint Program Office on operational strategies, policies and supporting ITS Technologies and their impacts on climate change;
• 21st Century Roadway Maintenance and more.

Meeting Host: The Missouri Department of Transportation; Organization Sponsors: AASHTO, The Bipartisan Policy Center and the Missouri Valley Section of the Institute of Transportation Engineers.

Supporting Organizations

Visit IBTTA’s website for information on registration, hotel reservations, exhibiting or sponsorship.  Show below is the conference agenda.

(Source: Times of India; Bloomberg)

Image Courtesy: Apture

India exported a total of 2,30,000 cars, vans, SUVs and trucks between January and July 2009, a growth of 18% even as China’s exports tumbled 60% in the same period to 1,65,000 units.

The Indian domestic market may be just 19% of China’s — which has overtaken the US to become the world’s largest — but the ‘Made In India’ tag, especially on small cars, has clearly acquired a global cachet, helping auto exports grow even as other countries suffered a slump.

Industry experts pointed out that India scores due to its liberal investment policies and high quality manufacturing which stems from its growing prowess in research and development.

India’s biggest advantage is its edge in small cars and the way companies — including global giants — are using the market for selling, as well as developing, new compact models.

Suzuki Motor Corp.,Hyundai Motor Co., and Nissan Motor Co. are making India a hub for overseas sales of minicars as incentives lift demand for smaller, fuel-efficient autos. Helped by cheaper labor and a surging local market, India this year overtook China in auto exports and is challenging Thailand and South Korea as an alternative production center in Asia.

“There is a worldwide shift toward fuel-efficient, compact cars,” said Jayesh Shroff, who helps manage about $7 billion of assets including carmaker shares at SBI Asset Management Co. in Mumbai. “This offers a huge potential for India and it can emerge as a leader in the small car segment.”

“There is a worldwide shift toward fuel-efficient, compact cars,” said Jayesh Shroff, who helps manage about $7 billion of assets including carmaker shares at SBI Asset Management Co. in Mumbai. “This offers a huge potential for India and it can emerge as a leader in the small car segment.”

In contrast, China’s exports slumped 60 percent to 164,800 between January and July, according to government data. Vehicles produced in Thailand for export declined 43 percent to 263,768, according to the Thai Automotive Club.

Besides the attraction of serving a market where three of four cars bought are compacts, automakers will favor India to set up an export base as China requires companies to form local joint ventures and India doesn’t, said Ashvin Chotai, London- based managing director of Intelligence Automotive Asia Ltd.

Small cars will account for 95 percent of the 690,000 passenger vehicles India will export in 2015, according to Tim Armstrong, Paris-based director of IHS Global Insight Inc. In 2016, India may share the top slot with Japan as the world’s biggest small car producer, building as many as 3 million units.

Indian labor costs are about 10 percent of that in the U.S. and Europe and raw material costs in the nation are lower by 11 percent, according to Puneet Gupta, an analyst at CSM Worldwide Inc., an industry consultant. Developing a car from the design stage in India may take $225 million to $250 million, while in Europe it may be $400 million.

Click here to read more.