German vehicle manufacturers are ignoring the market for low cost cars, according to one of Germany’s leading automotive industry experts, Ferdinand Dudenhöffer.
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He warned that “there is the danger that German car manufacturers have taken their eye off the world’s largest growing automotive segment, ” Dpa-AFX reported.
Dudenhöffer is managing director of B&D-Forecast institute in Leverkusen. The biggest low-cost car markets are expected to be China, India, eastern Europe and Russia.
The market for low-cost cars is divided into three segments – $US7-10,000, $5-7,000 and $2-5,000. By 2015, B&D Forecast is expecting 10m low-cost cars to be sold, 90% of which will be in the ‘new markets’.
The two most important segments are thought to be the two lowest cost segments, but Volkswagen and Opel are entering the US$7-10,000 segment. Here the competition will be harshest, according to Dudenhöffer, with slim margins and low volumes.
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By GlobalData“The German manufacturers are only working on stripped out cheap cars. They are forgetting the need for low-cost plant, low-cost logistics and low-cost sales networks,” said Dudenhöffer.
This leaves room for new entrants such as Chinese and Indian vehicle manufacturers, who are expected to capture a 40% share of the market.
