It’s the hottest of hot topics – but it’s open to the widest of interpretations. What, exactly, is a low-cost car? The Dacia Logan, Fiat Palio, Tata Nano, Maruti 800, Lada Zhiguli? Or even a five-year-old VW Golf?

The answer is all of them. Low-cost cars are the agents of growth in the global car market. German Tier 1 supplier Bosch estimates low-cost vehicles priced below EUR 7, 000 could reach a 13% share of the world market – or about 10million vehicles – by 2010, and consultants Roland Berger estimate annual global production of 18million sub-EUR10,000 cars by 2012. The reasons are clear, as the developed world stagnates in terms of car sales, emerging markets are driving growth. Producing cars that suit the needs of consumers in these markets becomes imperative for the car industry.

That means driving down costs to the consumer – low purchase price; low running costs. And it means driving down costs for the manufacturer in order to maximise profitability. Getting this equation right is essential – there’s less room to manoeuvre with a low-cost car, and margins are inevitably slight.

Chapter 1: Introduction - A brief overview of the sector and report coverage.

Chapter 2: Legacy cars – the slow demise of the obsolete model - One of the reasons why low-cost cars are required is the need to replace ‘legacy’ cars – obsolete models that have been produced continuously in those markets for up to 40 years. These cars often define the look of the country’s roads, but the legacy cars’ days are numbered as emissions regulations and especially crash-test rules are tightened.

Chapter 3: Brazil – remake, remodel and the legacy car lives on - Brazil remains the home of the legacy car as a market-entry model. Manufacturers are unwilling to commit to spending heavily on cars in this segment – so older models are endlessly repackaged. We talk about models such as the Fiat Mille, the Peugeot 206 and the Ford Ka.

Chapter 4: Russia and India – low cost is king - In both of these markets, foreign vehiclemakers entering the market have tended to chase the more up-market sectors, with fewer sales, but higher profits. Competing with low-cost cars, which neither meet modern crash-test nor emissions standards is a challenge, and has remained a low priority.

Chapter 5: Blind alleys – the radical solutions - We take a brief look at the attempts by vehiclemakers to create concept cars that address the needs of emerging markets, through using radical manufacturing and materials technologies in order to bring down costs. Significant recent examples are the Chrysler CCV and the Fiat Ecobasic.

Chapter 6: Modern low-cost cars – how low is low? - There is no single low-cost segment, and a low-cost car is not necessarily an entry-level model. We discuss a number of specific low-cost programmes that have been defined over the years, and others that are under development. Read more about the Fiat Project 178, Renault Logan (X90), Fiat Linea, Toyota EFC and the GM low-cost car.

Chapter 7: The Indian ultra-low-cost sector and the Tata Nano - The unique dynamics of the Indian market, compared to other emerging regions, is bringing about the development of a new class of ultra-low-cost vehicles. In this chapter we discuss the Maruti low-cost project and Renault’s discussions with Indian scooter maker Bajaj regarding a joint partnership to develop a small car. Comment from Renault X90 programme Chief, Gerard Detourbet is included.

Chapter 8: Conclusions - A round up of all the key points in the report.

Chapter 1 Introduction

Chapter 2 Legacy cars – the slow demise of the obsolete model

Chapter 3 Brazil – remake, remodel and the legacy car lives on

Chapter 4 Russia and India – low cost is king

Chapter 5 Blind alleys – the radical solutions

Chapter 6 Modern low-cost cars – how low is low?
Fiat Project 178
Renault Logan (X90)
Fiat Linea
Toyota EFC
GM low-cost car
Other market entrants

Chapter 7 The Indian ultra-low-cost sector and the Tata Nano
Maruti low-cost project
Renault-Bajaj

Chapter 8 Conclusions

List of tables
Table 1: Fiat Project 178 initial production plants (no. of vehicles and US$m)
Table 2: Actual production of Fiat Project 178 models, 1996-2001 (no. of vehicles)
Table 3: Renault/Dacia X90 production by location, 2007 (no. of vehicles)
Table 4: Renault/Dacia X90 sales by model, 2007 (no. of vehicles)
Table 5: Annual Dacia Logan sales, 2004-2007 (no. of vehicles)
Table 6: Dacia’s leading markets, 2007 (no. of units)
Table 7: Renault Logan production capacity estimate, 2010