The Hindu Business Line : Musings in an auto-rickshaw

The three-wheeler market is about a fourth of the passenger car market in size, but stagnant. (Above) A girl checks out a new auto-rickshaw acquired by a relative.

Under the guise of showcasing the real India, I enjoy sending our foreign friends for an auto-rickshaw ride. It is our version of adventure sports, I assure them, and watch amused as they sit nervously perched at the back of this peculiarly Asian answer to transport problems. Most emerge from it rather shaken, some really enjoy the mad, careening pace, and all of them get a huge adrenalin high.

The Indian auto-rickshaw driver combines dexterity with bravado, nimbly taking sharp 180-degree turns with a blind disregard for traffic rules. Safety is a serious concern. Every dinosaur-like truck looming close to the flimsy chassis makes you flinch at the thought of near-fatal contact. Every wild swing tosses you around like a pebble in a tin can (obviously, there are no seat belts). You try to control your drunken lurching by clutching onto the bar in the front, or holding onto the sides of the (door-less) entrance. And since it is door-less, the only way you can avoid rain, or bitter wind-chill, is to sit plonk in the centre, face muffled against the gusts of exhaust. The lack of effective shock absorption lends a bucking-bronco-at-the-rodeo feel to the ride, and you try not to think about whiplash injury and permanent spinal damage. How long can you hang on, you ask yourself, until it comes to a juddering halt. Even to a casual user, it seems obvious that there is considerable room for improvement in the design.

In Delhi, old vintage models are called phat-phutties after the sound made by the Enfield engine that is housed in it. In most other places, the early FEARs (front engine auto-rickshaws) have been replaced by improved REARs (rear-engine ones). I spoke to a designer who worked on that project, decades ago, and it appears to have been the last time the auto-rickshaw was subjected to any serious design change. As design goes, the auto is a pretty ugly looking specimen, with a humped, ungainly appearance. It looks like a local workshop tried tinkering with putting a tin-shell on the top of a scooter - which is probably how it originated in the first place. Yet, I found that each auto I sat in looked a bit different from the other - there was obviously a high degree of customisation. So I began talking to auto drivers, yelling my questions above the din of traffic and getting a sometimes intrigued, often impassioned, response.

All the auto drivers said they could not drive a vehicle that was fresh off the production line. At the very minimum, they needed to change the top canopy into a better-looking, longer-lasting fabric. Balaji, for one, finds his design sensibilities offended by the auto. "All other vehicles have had improvements," he tells me indignantly, waving at passing cars and two-wheelers. "Every year, we see new car designs, new two-wheeler designs - even cell phones have new designs," he says, pulling his out to show me. "But I have been driving these for 15 years and there is no change at all. It looks like a relic of my thatha's (grandfather) time".

Balaji wants to cater to the office crowd and is on the look-out for permanent savaris - so he has invested nearly Rs 40,000 in making it more comfortable - and more stylish - for his passengers, and for himself. He replaced the basic driver seat that came originally fitted with a more comfortable cushioned one to make his long hours on the seat a tad more bearable, replaced the cushions at the back. "We spend our whole day in this," he said, "why shouldn't we be comfortable?" He added cushioned padding on the sides and in the front of the passenger seat to protect passengers during unexpected lurches. "And for added effect, he points proudly to the Ben-hur-like wheel hub. Rajendra isn't as style-conscious as Balaji but he is concerned about safety. He complained that if you don't ensure gas-welding of crucial joints when they are new, the wear and tear shows up very quickly. Pointing to the rear window, he says, "See that? They sell it to us with plastic in it. After a few months it gets so scratched, visibility gets very poor. When I look in my rear-view mirror, I can hardly see. That's dangerous. So now I replace it when I buy a new one - I have to fit in a frame, then fit in glass - it's quite expensive."

Abdul was intrigued with all the questions. "No one has ever asked us for our ideas," he tells his friends, who nod in unison. "Why don't they ask us for what we need, we can tell them so many things!" He also had a point to make about the financing: "We have to go to money-lenders who charge such high rates. Or the owner who owns the auto makes us pay hefty instalments. Why can't the company have a friendly financing scheme?"

Balaji goes further. "I had to do this all on my own," he says, and tells me the total cost came to Rs 2.2 lakh. "It cost more than a car," he says, "but if I go to buy a car I get such good service, choice of colours, choice of interiors, why can't they give us this stuff?"

Why not, indeed?

It's not that the market is small. Though stagnating in terms of growth, the size of the passenger three-wheeler market is respectable at 2.3 lakh units per annum. That is about a quarter of the size of the passenger car market in the country. Customers are obviously ready and willing to pay for something better. Then why is there no change?

Perhaps because of the low degree of competition in auto-rickshaws?

Changing customer expectations is often stated as a reason for the need to innovate. But customer expectations do not change in a vacuum. Competitors come in with new products, which open the customer to new experiences, putting the pressure on the existing companies to deliver an even better product.

No one seriously disputes that increased competition leads to more innovation. Take a look at industries with low competition and you find slow-growth businesses written off as "sunset" businesses. Not surprisingly, little innovation takes place here. The auto-rickshaw market is a prime example. The market is dominated by one company (Bajaj Auto) with a market share of over 80 per cent. In 2000, it planned to make a change from two-stroke to four-stroke engines, driven by competition. From its point of view, if your products are selling, and profitable, why bother to experiment? As the old saying goes, "If it ain't broke, don't fix it."

And there is little interest to try and develop new markets either. I can think of one major innovation in auto-rickshaws in the past few years - the share auto. But our friendly auto-drivers tell us that it is dominated by local entrepreneurs - the biggies are just not interested. Nonetheless, there is hope for long suffering auto users - the drivers and the passengers - TVS and Honda are planning to enter the segment soon, and hopefully their entry will do for auto-rickshaws what Maruti once did for cars. Vive la competition!

(Radhika Chadha is a management consultant. Karategy is the proprietary name of the strategic exercises conducted by Paradigm Management Knowhow.)

More Stories on : Strategy | Two/Three Wheelers | Karategy | Market Shares

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Musings in an auto-rickshaw

What the ad gurus say

Mere sound and fury?

Getting more bang for the Balsara buck

Hey mom, it's here!

Don't lose sight of corporate identity

Play on