Speaking to Automobilwoche, consultants A.T. Kearney predict that Ultra-Low-Cost cars (ULCC) will be the industry's next Next Big Thing. We're talking simple, robust, safe, easy to repair vehicles costing between $2500 and $5k. Kearney reckons the cars will find favor with millions of middle class buyers. In 2005, Indian had about 391m inhabitants who could afford a ULCC. The number will grow to 628 million by 2020. Companies such as Tata, Mahindra & Mahindra or Maruti are chasing the dream of 24 percent yearly growth rates. Meanwhile, the LCC (Low Cost Car) market is already booming. Production of the Renault/Nissan/Dacia's €8k Logan is expanding to South Africa. And just in case you take a dim not-to-say Freidman-esque view of third world auto emissions, a tuned version of the Logan won second place at the yearly Challenge Bibendum. A diesel Logan bettered 72 other entrants by logging a parsimonious 2.72L/100km (86.5 mpg).
Find Reviews by Make:
Read all comments
Perhaps things will change, but the only way to sell a ULCC in the US right now is to rate it as a motorcycle or a Neighborhood Electric Vehicle – a glorified golf cart.
The thing to keep in mind about motorized vehicles is that almost everyone on Earth who can afford one wants one. … the world will want to consume 116 million barrels per day of oil in 2030. The desire for transport “is the main driver.”
http://www.aspo-usa.com/index.php?option=com_content&task=view&id=257&Itemid=91
Consider what’s happening in India and China. … car ownership in both countries has been and still remains, by U.S. standards, almost absurdly low. There are nine personal vehicles per thousand eligible drivers in China and eleven for every thousand Indians, compared with 1,148 for every thousand Americans. But incomes in the two countries are rising so rapidly — the Chinese economy grew by eleven per cent last year and is expected to grow by the same amount this year—that millions of vehicleless families will soon be in a position to buy automobiles. Assuming that incomes continue to rise, in a few years tens of millions of families will be buying their first cars, and eventually hundreds of millions.
At the start of “Auto Mania,” McCarthy writes that his is “not an angry book. We don’t need another angry book about automobiles.” In fact, as he acknowledges, many of the stories he recounts have already been told (and, arguably, told better) in earlier, more indignant works, like Jack Doyle’s “Taken for a Ride” (2000) and Keith Bradsher’s “High and Mighty” (2002). What distinguishes “Auto Mania” from these works, besides its tone, is the scope of its indictment. McCarthy doesn’t blame Detroit for the ills of Detroit; he blames all of us.
http://www.newyorker.com/arts/critics/books/2007/11/05/071105crbo_books_kolbert
I’ll bet if cars like this were sold here at a reasonable price, they would kill cars like the Chevy Aveo and Hyundai Accent and Kia Whatever it is. My mom bought a penalty box Nissan Sentra back in ’86 for around $6000 and that car was a super el-strippo model, it did not have a radio, A/C, or even a cigarette lighter. She would buy exactly that car again if such a thing were available today- she doesn’t need or want electric windows and locks and seats and ac and cruise control and a radio. At $5K it would be a great deal, but at 8000 euro- that’s like 9 or 10 thousand dollars, enough to buy a year old Taurus, not so much.
I agree with you guys — who knows whether or not a ULCC or a LCC would have a chance in the U.S.?
The thing to remember however is: this segment is happening, and it is going to be big. Anybody who wants to make serious money in the next few decades better be in it. You can bet that Toyota is watching it closely.
I really think that the ULCC is a great idea. The idea of selling new cars to people of limited means has worked almost every time it has been tried.
Are you saying that diesel Logan would pass U.S. emission standards? I’m joking, of course, but isn’t the air quality already terrible in India’s large cities?
rpn453: the diesel Logan they sell in Europe is OK with Euro4 emission standards. It’s not exactly a picknick to meet those.
I cannot tell you how bad the particulate emissions of the Challenge Bibendum Logan are but if it is important for you, I’ll research it…
But your real concern is valid — when you address the terrible air quality in India’s large cities. But what’s better: two-stroke motorcycles or (relatively) modern four-stroke engined car? I’d think the latter. From what I have heard, the Indian and Chinese car makers are pretty serious about emmission controls.
$6000 in 1986 would be $11,500 now. Edmunds lists 34 cars for sale under $15,000 MSRP. I don’t think it is a real issue in the US.