It has become a general tendency, taste and prestige to possess a car among those who can well afford to have it. Question arises: is car a luxury? Answer to this question is an emphatic No. Not at least in the context of the present day socio-economic conditions in India. True, there was a time when the car could be considered a luxury. In those days, people used it more as a show, status, symbol, a display of wealth than for day-to-day business & trade. But at present, it is not so. In most of the cases, car performs an essential productive service. An analysis of the car ownership shows that there are basically four categories of car-buyers: Government Departments, Public Sector Undertakings and companies, businessmen and professionals and the taxi trade. Nobody can deny their vital importance to the national economy and society. Try to imagine, administrators, police or military personnel, to whom time is crucial, cannot afford waiting for an indefinite period to avail themselves of public transport. Can industrialists, business men, executives, doctors, lawyers and engineers afford to do without it? In fact, in modern life car has become a necessity rather than luxury. By providing speed and greater mobility, it has become indispensable for all those to whom time is money an important aid to efficient service. May be, in limited cases, a car is used for pleasure trips, social calls etc. but their proportion is very small. The socialist countries too, have started giving high priority to car production. Leave alone the highly industrialised countries like United States of America or Western Europe where car has become a way of life. Even tiny, socialist countries like the Democratic Republic of Germany and Czechoslovakia produce 3 to 4 times more cars per annum than India does. The proportion of cars to truck production is also much high. In these countries, it is as high as 5 to 1 against nearly 1 to 1 in India. Even the less developed socialist countries have more cars per unit of population than that in India. You will be surprised to learn that number of persons per car in small countries like Bulgaria, Poland and Hungary is around 50, whereas in India it is approximately 1000.Why the cars are beyond the means of potential customers in India? The main reason why the car ownership in India is so restrict- ted lies in the fact that exorbitantly high level of taxes have artificially pushed up the prices of cars beyond the means of potential customers.