It was so low because of the per capita income that was equally low, and looking into reasons for such a disproportion would lead to a wide-ranging discussion.
Times have changed a lot. It wasn't until the 90s that the average middle class family could afford a car. The father bought his first car at about the same time I did, except he was 50 and I had just started grad school in the US.
Cars were definitely a luxury item while I was growing up. Better incomes, more choice, ability to get car loans, etc have made cars the norm now (in big cities at least).
In cities like Kolkata the taxi fleet is Ambassadors. I don’t know what the average age of the vehicles is, but they almost always feel as old as they look.
For all its faults, the Ambassador is a robust vehicle.