Auto Loans fuel congestion

Last updated at 4:00 pm, Wednesday, October 31, 2007.

By Ranjani Rajendra and Ishta Vohra

CHENNAI: Easy availability of car loans from banks and financial institutions has empowered the middle class to buy more cars. This has led to an increase in the number of vehicles on the roads adding to traffic congestion.

According to data available with the Regional Transport Office, as of 2006, there are a total of 3, 24,989 cars in Chennai and 2, 86,751 two-wheelers. “We have sold 1840 cars in the last one month in Chennai,” said S.Yuvraj, Sales Manager, DSC Hyundai, adding that in the same month, Tata Motors in T. Nagar had sold another 960 cars. He said that these figures were only a fraction of the total number of cars flooding Chennai roads.

Though the increased buying power of the middle class has added a sizeable number of cars on the roads in Chennai, it is the upper class with a norm of two cars per family which has unmindfully added to traffic congestion. Karunadharan, Sales Executive at ABT-Maruti said, “There are so many instances of parents retaining their earlier cars when they go in for a newer model.” Parents are handing down their small cars to their children as they opt for newer models.

Dealers introducing tie-ups with MNCs such as Infosys, Wipro and HCL, which offer special corporate discounts, are also contributing to traffic congestion. Tata Motors, for instance, has special discounts for Tata employees which are higher than what it offers to Corporates. “When Corporates buy vehicles from us they opt for utility vehicles like Safari and Sumo. Families and individuals on the other hand go in for small cars or sedans like Indica and Indigo,” says Veena Vishwanath, Sales Manager at Tata Motors.

Apart from dealers of new cars, there are the second-hand car dealers who work the numbers for used cars in Chennai. On an average, around 10,000 used cars are sold in the city per month. One of the largest dealers, Jains Car Shoppe confirmed, “We sell around 100-150 cars in a month. People prefer buying used cars since they are more affordable and also have a good re-sale value.”

When asked about traffic congestion Selvaraj, traffic constable, complained, “The increase in the number of vehicles in Chennai is making it very difficult to manage traffic. There are also an increasing number of under-aged drivers. The fact that most people do not obey traffic rules makes matter worse.”