Blog: Dave LeggettIf it's good enough for you...

Dave Leggett | 23 February 2007

This global manufacturing village that we all inhabit isn't as simple as it looks. Global sourcing often throws up some uncomfortable issues. People in India, Eastern Europe, Western Europe, South America, Japan, China aren't all earning similar incomes and faced with the same automotive purchasing parameters. What's right for an affluent and relatively developed market may not be appropriate for a developing one. The regulatory playing field will be different too.

The differences and inconsistencies can be thrown into sharp relief when vehicles are built for different markets. If Volkswagen wants to globally source some vehicles from relatively low-cost Brazil, then the ones made there for the EU will have to meet EU market requirements.

As far as safety goes, mandated standards for the EU will therefore be higher than those in the market where it is made. 'Levelling up' on models made for the domestic market might be easier said than done depending on the models we are talking about (perhaps domestic market only) and the costs involved.

And there's an important question to ask: are Brazilian consumers prepared, or indeed able, to pay for European levels of safety?

And then there are stripped down, low-cost cars, designed for price sensitive emerging markets. How much safety content can/should they take? The cars are meant to be cheap, remember. Do the local authorities care? Is the Chinese government imposing EU-style safety rules on Chinese automakers? Not yet. It's a dash for growth at all costs. Safety and environmental concerns are generally subservient to economic growth. 

If you visit Beijing and take a look at the construction work going on all around, you'll notice that the local Health & Safety rules appear to be pretty relaxed.

BRAZIL: VW denies domestic models less safe than exports


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