A new study by consultants AT Kearney forecasts that global demand for low-cost cars (priced below US$5,000) will grow to 17m units a year from 2020. The biggest opportunity is for cars with a selling price below US$4,000.
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The biggest markets for such cars is India and south east Asia. There is less opportunity for cars in this price range in China or Russia.
Currently no cars are sold in this price range.
Tata has led the hype for low-cost cars in India by developing a US$2,500 car – the so-called 1 lakh car (100,000 Rupees).
The car is much anticipated and has yet to be launched, but it has already spawned potential rivals. Renault, whose Logan is priced over US$5,000, is planning a US$3,000 car, in partnership with Indian scooter maker, Bajaj.
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By GlobalDataMaruti Suzuki, currently the market leader in India, is also planning a competitor. Its lowest cost model – the evergreen 800 – currently sells for just over US$5,100.
See also: GERMANY: Tata shoots for 1 million pa volume on 1-lakh car
September’s Bonus management briefing: The Low-Cost Car: Reasons, Rewards, Risks
