Let the price wars for sub-compact cars begin! Car companies seem to be racing to build really cheap cars. Renault-Nissan announced at a plant-opening on April 4th that it was planning on building a car for under $3000, which is 40 percent less than the least expensive sub-compact car available today. In addition to that announcement, Tata Motors, an Indian carmaker, claims that they plan to launch a $2500 car next year.
Implications - Consumers are definitely not complaining about the rise of cheaper cars. People who were not able to afford a car in the past, may have a chance now. Roland Berger Strategy Consultants have stated that by 2012 "the market for vehicles priced under $10,000 is likely to reach 18 million cars."
Key Themes Behind This Trend
- Race for Cheap Cars
- Car companies are competing to build incredibly cheap cars, with vehicles being developed for under $3000 and even $2500.
- Affordable Vehicle Market
- There is a growing market for vehicles priced under $10,000, with the number expected to reach 18 million by 2012.
- Global Access to Personal Cars
- Affordable cars can help democratize the automobile industry and provide increased access to personal transportation around the world.
Where This Applies
- Automotive Industry
- Car manufacturers have the opportunity to tap into a new market of consumers who previously were not able to afford a vehicle.
- Emerging Markets
- Emerging markets could especially benefit from the development of affordable cars, allowing more people to have access to personal transportation.
- Transportation Services
- As more people have access to affordable personal cars, there could be a shift away from traditional transportation services such as mass transit or ride-sharing companies.
