Not long ago the subcompact market in Brazil was regarded as niche and far from attractive to automakers. Current offerings are all imports like the Fiat 500 (from Mexico under the free trade agreement), Smart, Kia Picanto and Chery QQ.
The locally made Fiat Uno Mille and Ford Ka (a unique local model on Fiesta architecture) are subcompact-priced yet both are dated designs and surely cannot be considered city cars and both will be axed in 2014.
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But the scenario will change with the launch of the VW Up early next year. It will have changes from the European model to make room – obviously limited – for three in the rear seat.
There is now a new consensus these small, more affordable models are likely to attract a large number of new, first-time buyers of brand new cars.
They are also an alternative for commuting in ever more congested Brazilian streeets with fewer parking spots, as the second or third car of wealthier households.
The city cars will be powered by three cylinder engines like the Up and the new Ka – this new Ford will come in hatchback and saloon versions. Fiat, too, is developing a city model for mid-2015. The brand will go for a four-cylinder engine as it lacks a three and the twin has been deemed unsuitable.
GM and Renault admit they will have an interest in this sector within two or three years.
It seems the US automaker will include a similarly sized model in its still developing investment plans estimated at US$1.19bn/BRL2.5bn.
The turbulent São José dos Campos plant, in São Paulo state, would be the leading candidate to produce the car. If no deal can be agreed with the union, the plans would switch to Gravataí in the south, home of the Chevrolet Onix, Prisma and Celta (the end is near for this latter ancient model).
The city car could be a low-cost, Opel Adam derivative with good export prospects.
Renault is also planning for a similar product, yet more subtly. Since the new Twingo will share parts with the new Smart, it would be relatively easy for the French designers to include a car with characteristics aimed at the Brazilian entry level segment.
Both automakers’ models would have modern, three-cylinder power as well.
