Only a few years ago, premium cars were all the rage. Now automakers around the world are scrambling to build cars that cost less than $10,000. And some are even striving for a sticker price as low as $3,000. The ostensible lure is hundreds of millions of first-time car buyers in emerging markets. But Western consumers are also showing an appetite for cut-rate wheels. That's because the new generation of low-cost cars offers better quality, comfort, and safety than the bargain-basement models introduced in the 1980s, such as Russia's Lada, the Yugoslavian Yugo, and the Fiat Uno.
This time around, cheap cars will come in all sizes and shapes, from small subcompacts to big minivans. French automaker Renault pioneered the new no-frills car with its roomy 2004 Logan sedan and is rolling out a family of six different models. Expect a swarm of cheap wheels to hit the market by 2009-2010, when Toyota, Volkswagen, Nissan, Fiat, and others unveil competing models.
GM Daewoo Matiz Mini/Chevrolet Spark
General Motors' takeover of Korea's Daewoo Motor in 2002 has given the U.S. giant a source to develop small cars at lower costs. GM executives acknowledge that the Korean unit, now called GM Daewoo Auto & Technology, has been crucial in internationalizing the Chevrolet brand. The vast majority of non-U.S. sales of the vehicle under this nameplate come from Korea.
The Matiz mini, also called the Chevrolet Spark in some markets, is a five-seat, five-door hatchback. GM, whose joint venture in China is assembling the Spark in China with kits shipped from Korea, is due to manufacture the vehicle in India from this year. It is powered by a 0.8-liter or 1-liter single overhead camshaft (SOHC) gasoline engine and measures 11.5 ft. in overall length, rides on a wheelbase of 7.7 ft., and is 4.9 ft. tall. Last year, some 291,700 Matizes and Sparks were sold in Europe, China, and other Asian markets. At the New York International Automobile Show in April, GM unveiled the four-door Chevrolet Trax, a concept model developed from the Matiz, to gauge interest in the mini among U.S. buyers.
Hyundai Atos
Hyundai Motor gradually reduced the output of its Atos mini car in Korea to shift its production base to India, and since 2003, Hyundai has been making all of its Atoses there. A mainstay in India, where it is sold under the Santro badge, the vehicle is a five-seat, five-door hatchback. First launched in 1998, the Santro measures 11.5 ft. in overall length, rides on a wheelbase of 7.8 ft., and is 5.2 ft. tall. In its European incarnation, power comes from a 1-liter multi-port injection SOHC gasoline engine, while the Indian model is fitted with a 1.1-liter MPI SOHC. A five-speed manual gearbox is standard, while a four-speed automatic is optional. Prices in India start at $6,350 for the base model and climb to $9,920 for the fully loaded top-end model. Options include air conditioning, antilock brakes, power windows, and dual front airbags. Over 1.3 million Atoses have been built, with more than 313,000 units exported from India to over 60 markets around the world.
Hyundai Getz
Taking careful aim at the European small-car market, Hyundai had the Getz designed at the company's European styling studio to ensure the final product met European tastes and needs. In late 2006, Getz production shifted from Korea to India, expanding the role of the Indian subsidiary as Hyundai's global hub for small cars. Getz exports from India began recently.
The five-seat, five-door hatchback stands 4.9 ft. tall, shorter than the Atos, but the Getz is longer, sporting a wheelbase of 8.1 ft. and an overall length of 12.5 ft. Power comes from a wide variety of powerplants: The base Indian version is fitted with a 1.4-liter SOHC. Gas-electric hybrid versions of the Getz are available in Korea, while Europeans favor the 1.5-liter diesel. The 1.6-liter DOHC gas engine is the most popular in all other markets. Electronic brake force distribution and dual front and side airbags are among the options. Since the model's introduction in 2002, more than 863,000 units have been sold. Getz prices start at $9,400 and max out at $11,700.
Suzuki Maruti 800
Launched in 1983, the compact Maruti 800 with a 796-cc gasoline engine was the smallest car ever to hit Indian roads. Made by Suzuki Motors in partnership with the Indian government at a plant in Gurgaon, outside New Delhi, the Maruti has been the king of the small-car market. Nobody has been able to beat the four-door, 10.9-ft. long, 1,444-lb. M-800 on price. With a current price tag of $4,400 and up, it was the dream drive for middle-class Indians. Suzuki has done little to tweak the design of the fuel-efficient-15 km a liter (roughly 36 mpg)-vehicle. Maruti has been saying that it's phasing out the M-800 for some time now. But with Tata's $2,200 car expected in 2008, there's talk that the M-800 price will be slashed to take on the new competitor. Its clientele has largely been buyers upgrading from two-wheelers. The M-800 is exported to Chile, Egypt, Algeria, Peru, and Nicaragua.
Suzuki Maruti Alto
Once not so popular in India, the diminutive five-seater Suzuki Alto is now driving Maruti's exports. Launched in 2000, the 47-bhp, five-speed transmission car was a laggard until 2003. Today the entry-level compact is the best-selling vehicle in the Maruti Suzuki stable, knocking the M-800 from the top slot. In 2006-07, the Alto, with its contemporary design, sold 200,000 units in just 11 months. First unveiled for the European market at the 2002 Geneva Auto Show, it has been exported to most European countries. Costing upwards of $6,000, it is expected to replace the aging M-800 as the flagship.
Suzuki Maruti Swift
The Swift is Maruti Suzuki's first global car, launched simultaneously in Japan, China, Europe, and India. Maruti's engineers spent nearly a year in Japan working on the design and development along with their Suzuki counterparts. Considered to be one of the most stylish cars on the Indian roads, the 1.3-liter Swift launched in 2005 and costs $8,800 and up. With 100,000 units produced, it is currently being exported to Subcontinent countries.
Tata Indica
India is gaga over the Indica, the country's first indigenously designed, developed, and manufactured car-and a best-seller to boot. It is made by Tata Motors, a division of India's best-known conglomerate-the Tata Group. The launch of the 1.4-liter diesel Indica in 1998 was followed two years later by a gasoline version. The Indica realizes Chairman Ratan Tata's dream of providing all the comforts of a big car for the price of a small one. The success of the Indica has now spurred Tata to build an even cheaper car, with a price target of around $2,200.
Chery QQ3
Wuhu (Anhui, China)-based Chery's most popular model is the QQ, which launched in 2003. The 0.8-to-1.3-liter QQ sells for $3,900 to $5,200 and competes directly with the Chevrolet Spark, which is based on GM subsidiary Daewoo's Matiz. Indeed in 2005, Chery settled a three-year suit against it by GM Daewoo, which alleged the Chinese company had copied its car. The QQ is popular with youthful first-time auto buyers in China and sells particularly well to women. The QQ, which already is exported to the Middle East and Latin America, is scheduled to go on sale in Turkey later this year.
Chery Flagcloud
Also called the Cowin, this four-door sedan was launched in August, 2003, and is produced at Chery headquarters in Wuhu, Anhui, China. It has a 16-valve, four-cylinder engine that revs to 6,000 rpm. But the Flagcloud also boasts a fuel-efficient, low-emission engine aimed at meeting European standards, and features antilock brakes and electronic brake force distribution for safe driving in inclement conditions. Sticker price ranges from $7,300 to $12,500. The Flagcloud is exported to more than 30 countries in Southeast Asia, Latin America, and Eastern Europe and is also assembled in Russia, Ukraine, Iran, and Malaysia. Chery has announced plans to sell a range of its models in the U.S. within the next few years.
Geely HQ S-RV
Launched in 1998, the HQ or Haoqing, is Geely's first product and is based on the Daihatsu Charade platform. The HQ S-RV is a hatchback sports recreational vehicle with an engine size ranging from 1.0 to 1.5 liters. It is popular in China for its low price-$4,400 to $6,200-and its roominess, with 520 cubic liters of interior space and a rooftop rack that can load 55 kg (121 lb.). The HQ S-RV also comes with a full range of accessories, including a centrally controlled locking system and a rear-window washing system. It is produced in Zhejiang province, which neighbors Shanghai, and is exported to countries in the Middle East including Egypt and Syria.
Geely Merrie Star
Launched in 2005, the Merrie Star is a four-door sedan with an engine size ranging from 1.0 to 1.3 liters. Its price ranges from $4,200 to $6,500 and is popular in China among middle-income families who are first-time car buyers, particularly in the smaller cities of China. It is produced in Geely's Ningbo, Zhejiang factory. Geely, which already exports to Southeast Asia and Africa, says it aims to export its cars to the U.S. market by 2010, although it has not specified which models.
Fiat Palio
Fiat's Palio is a forerunner of the new-generation low-cost cars. Launched in Brazil in 1996, the subcompact was designed on the platform of the '80s-era Uno as a world car for developing countries. It is now a family of five models ranging from hatchback to station wagon, also built in Russia, Poland and Turkey. The Palio sells for around $5,000 in those markets, but analysts say the car is outdated and increasingly uncompetitive as it relies on older technologies and components to keep costs down. Fiat announced in March that the Palio family will be replaced by a new-generation super-low-cost car, also called the Uno.
Fiat Uno
Fiat's cheap and cheerful cars reigned supreme in Europe in the 1980s, when the first Uno subcompact was launched. Cheap sticker prices and low maintenance costs made the Uno a hit 20 years ago, but quality and handling were subpar, and popularity waned over time. Fiat stopped selling the Uno in Europe in 1995, but still produces it in emerging markets such as Brazil, where it is called the Mille and even includes a flex-fuel system that allows it to run on ethanol. A new ultra-low-cost Uno is now on the drawing board at Fiat's Turin research and development center.
Dacia Logan Sedan
French automaker Renault pioneered the 21st century cheap-is-chic car segment with the 2004 Dacia Logan. The goal was to offer buyers in emerging markets maximum roominess for the lowest possible price: €5,000 ($6,600). Rivals derided the boxy sedan as outmoded, but when it was unveiled at the Paris auto show, West Europeans clamored for the spacious, no-frills 75-hp sedan. Renault slashed costs by building the car in Romania, stripping out a lot of electronic gear, and making many features such as power steering optional.
Dacia Logan MPV
This low-cost, seven-seat minivan first hit European showrooms in October, stoking sales for Renault. Customers in Western Europe are waiting six months for delivery. No wonder: The starting price of the Romanian-built minivan is €8,200 ($10,900)-some 40% less than rival models by Skoda, Volkswagen, or GM-Opel. A luxury model with air conditioning and power steering starts at €11,600 ($15,500). This model's attractive design, modular interior, and huge load capacity show how the new generation of low-cost cars could grow to 15% of the total Western auto market.
--
