Car Wars Shift To Rising Third World Countries

By Automotive Staff | April 10, 2007
The third world population is rising off their rickshaws and mopeds and demanding automobiles. And the world's auto makers are going to have to decide if they want to become a part of that market. According to Telegraph, car manufacturers, historically, would dump obsolete models in the market. Then in 2004, French automaker Renault (pictured) got serious and released the Logan, a four-door sedan that sold for 5,000 euros ($6682). Originally constructed in Romania, it was sold in the Eastern European markets where demand has exploded. Plants are now planned for Russia, Morocco, Iran, and Columbia. An even less-expensive version is scheduled for release in China. This is not the first time automakers have attempted to make basic, econo cars. In 1998, for example, Chrysler produced a $6,000 car made of the same plastic used for drink bottles. The car was meant to crack the Chinese market. But it was shown to Chinese government officials and they were offended. Fiat tried next with a car called the Ecobasic the next year but it turned out to be too expensive to produce. So, one would think that the majors will be staying out. Not necessarily. You see, it is expected that the market for low cost cars could be as much as 15 percent of the total world market. And with the fierce competition between all the worldwide car makers, that market share looks rather appealing. According to GM CEO Rick Wagoner, the company actually tested a econo-concept about five or six years ago. Called the “Asia Family Car”, GM looked into all sorts of ways to develop a car that could be sold for about $3,500. Unfortunately, the essentials of the car -- the engine, the transmission, suspension, axles, wheels, brakes, etc. were too costly. But times are changing. Again. Car makers continue to look at technology and innovation to come up with something feasible. So don't be surprised that, within the next decade, the low cost car could very well become king. Well, maybe not king, but at least a major player.