Blog: Dave LeggettLow-cost cars

Dave Leggett | 4 April 2007

If you are financially challenged, what sort of wheels do you go for? For many people, the obvious first step is to take a look at the used car market. Get yourself a 2-3-year-old Golf if you want the default used car of choice for many people in Europe. But if money’s really too tight to mention, the choice is vast.

Where do ‘low-cost’ cars like the Renault/Dacia Logan fit in? Well, mainly they are for developing markets where there is a latent appetite for a robust and low-cost new car that is carrying design and engineering appropriate to local market needs (maybe not exactly a EuroNCAP star performer…). They can be made locally to keep cost down and simple design means low costs of maintenance. They’ll stay on the road a while – further helping to bring motorisation to people for whom it was previously out of reach.

Curiously, another market seems to have been identified – selling these cut-price cars in developed markets where they can perhaps open up a new entry-level segment. This is where it gets a little potentially strange in my mind.

If the cars have to be specced up for more mature markets, then is it really worth going to all the trouble to ship ‘em and distribute/market them? Why not just do a cheap‘n’cheerful base Astra/Focus/Megane? Or is that not so easy any longer? How much can you de-content (love that mangled English of a verb), say, an Astra?

But is the price difference between the brand spanking new low-cost car and a decent spec used car all that different? And if they are not specced up much who wants to pay for something perceived as ‘new but rough as hell’? Volkswagen Fox didn’t fly out of the showroom and why would it when there’s a perfectly fine Polo for not all that many more spondoolies.

Or am I being unfair? Will a Dacia Logan be no different in the eyes of a commodity/value driven consumer in Western Europe from a Chevrolet Lacetti/Nubira? And can Renault do it cheaper on the back of huge global volume and ultra-low labour rates in Romania or India? ‘Look at the sticker price on that baby.’ 

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