Carmakers looking at low-cost cars for emerging markets


Frankfurt : Carmakers are rushing to produce low-cost cars for well under 10,000 euros ($14,000) to tap growing mass markets in countries such as China, India and Brazil.

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A range of small, compact and economical cars were presented at the recent Frankfurt Motor Show (IAA) including the Daihatsu Cuore, Fiat 500, Toyota iQ, VW Up and Opel Agila.

The French car maker Renault, which produces the low-cost Dacia Logan in Romania, announced in Frankfurt that it was looking at producing cars for countries such as China and Brazil for as little as 2,000 euros.

General Motors (GM) is also considering plans to develop a car costing less than $4,000 for these markets, according to CEO Rick Wagoner.

But with sales of new cars stagnating in Germany, the biggest European car market, carmakers are also hoping to push up sales as a growing number of consumers are refusing to spend more than 10,000 euros on a car.

Rising fuel prices, lack of parking and urban congestion make the agile microcar with space for four people an attractive proposition for many a motorist in big European or North American cities.

The VW Golf, which was once a cheap car when it was launched as the successor to the VW Beetle in 1974, now sells in Germany at 16,700 euros for the basic two-door version with the Golf Plus 2.0 TDI Sportline priced at just less than 24,000 euros. The current Golf has a length of 4,211 mm compared to 3,432 mm for the 1970s model.

Reacting to criticism that it was no longer a producer of real Volkswagens (“people’s cars”), VW returned to its roots by presenting the VW Up concept vehicle at the Frankfurt show. Like the old Beetle it has a rear engine.

With a length of 3.45 metres and a width of 1.63 metres it is in the same small car category as the Toyota Aygo, Peugeot 107 and Citroen C1. It is even smaller than the current VW Fox and should it ever be produced would sell at about 8,000 euros.

Also in the 8,000 euro-category is the Toyota IQ concept, aimed at the microcar Smart Fortwo segment. The vehicle seats four and Toyota said it was looking at various drive concepts including electric and hybrid engines. According to some reports, the car could be ready for production in about two years.

The new Opel Agila, which celebrated its world premiere in Frankfurt and shares the technology with the Suzuki Splash, also falls into the micro-car category measuring just 3.7 metres but seats four persons with a luggage volume of between 225-1,050 litres. Suzuki builds the two petrol engines while the diesel motor is from GM. But both Suzuki and Opel are keeping quiet on the price prior to the sales launch early next year.

Meanwhile the completely new seventh generation of the Daihatsu Cuore, which was first presented at the Geneva Car Show, will be in European salesrooms in September. It sells for just 8,990 euros but with all the extras such as Anti-Lock Brake System (ABS), front and side airbags.

The top version, which sells for 12,000 euros, however has nice extras such as ESP (electronic stability programme), air conditioning, CD Player, central locking and electric windows.