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201407 Nov

Global NCAP Safety Concerns are Justified, But Misplaced

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The New Car Assessment Program, or NCAP, has classified a number of vehicles on sale in India as ‘unsafe’, with potential life-threatening injuries in the event of an accident. While Global NCAP is inherently well-meaning, its understanding of the Indian market, or lack of it rather, means that such an approach is impractical for India.

 

The Datsun GO is the latest car to be classified as unsafe, according to G-NCAP. They awarded the GO with 2 stars for child safety and 0 stars for adult occupant safety. The chairman of Global NCAP, Max Mosley, went so far as to call upon Renault-Nissan chairman Carlos Ghosn (Datsun is a subsidiary of Nissan) to withdraw the model from the Indian market. “It is extremely disappointing that Nissan has authorised the launch of a brand new model that is so clearly sub-standard. As presently engineered the Datsun Go will certainly fail to pass the United Nation’s frontal impact regulation. In these circumstances I would urge Nissan to withdraw the Datsun Go from sale in India pending an urgent redesign of the car’s body-shell.”

 

The Datsun GO joins a long list of Indian cars that Global NCAP considers unsafe. These include the Maruti Swift, Maruti Alto 800, Maruti Alto K10, Tata Nano, Ford Figo, VW Polo, the Hyundai i10 etc. What do all these cars have in common? They’re all small, cheap and functional hatchbacks, most of which have been designed and engineered with Indian customer expectations in mind. Some of the models mentioned above, like the Volkswagen Polo and the Ford Figo may be global models, but their safety equipment and specifications have been catered for with Indian customer preferences. The Polo as sold in India was given a 0-star rating, since upgraded to a 4-star rating (out of a maximum possible 5 stars) once two front airbags were fitted as standard.

 

Yes, India has the worst road death toll of any country on planet earth, but it would be foolish to presume that it has everything to do with certain cars in Indian not meeting the exalted expectations of a global rating body. For sure, safer cars would help, but to a small extent.

 

The Datsun GO, which Global NCAP tested most recently, failed on every count. So much so that installing airbags is deemed pointless, considering the basic structure itself is weak. The GO, like its shamed compatriots named above, is a cheap car, costing less than 6,000 US dollars. This figure however, is almost 5 times the per capita income of the average Indian, adjusted to nominal GDP. India’s cheapest car, the Tata Nano, is more than twice the average Indian’s per capita income.

The United Kingdom, where Max Mosley hails from, has a per capita GDP of 39,000 USD. The cheapest car on sale in the UK is the Dacia Sandero (incidentally a Renault-Nissan brand), which retails for the equivalent of 10,000 USD.  

Datsun, or its Nissan parent, aren’t without the technical wherewithal to engineer a safer, more robust car. But in doing so, they will miss all market pricing expectations, the weight of the car will go up, and the fuel efficiency will come down. Fuel efficiency, or ‘mileage’ as Indian customers call it, is often the single most important factor in choosing a car.       

Doubtless, the accountants at Renault-Nissan are aware of these macro-economic factors, which pre-empt any car maker from building a small car which meets the expectations of Global NCAP, yet satisfies the Indian customers’ pocket. Horses for courses, as they say. Global NCAP may be well within its rights to suggest that countries and markets that subscribe to its ratings, and mandate those in the garb of regulation, to bar sales of the Datsun GO. But for India, the GO still remains relevant.

 

Instead, Global NCAP might want to utilize the funds and research facilities at its disposal to see how best to improve the various aspects of road safety, including traffic management, driver training, pedestrian awareness, etc particularly in emerging markets. It can then share these with not just the auto manufacturers but with the relevant authorities to improve road safety in a holistic manner, rather than just giving a 0-star rating to a car. Incidentally, if all the Indian cars that Global NCAP rated as 0-star were to be withdrawn, the bottom would fall out of the market, quite literally.

 

In the final analysis, Global NCAP appears to have over-reached itself. It has publicly exhorted the top boss of a global top-5 car-maker to withdraw a particular model, with little or no understanding of the realities of that market. In doing so, it may have done a dis-service to itself by compromising its credibility.