Edition: U.S. | Arabic | Set Pref
May 26, 2008
Posted: 859 GMT

LONDON, England – The car industry is to manufacturing what Madonna is to music. It is constantly having to reinvent itself to stay relevant, and has been pretty successful.

Chairman Ratan Tata poses next to the Tata Nano.
Chairman Ratan Tata poses next to the Tata Nano.

One of Madonna’s more memorable phases for me was when she was constantly stripping (well I was a teenager) and that seems to be the phase the car industry is going through now. All the big car makers seem to be coming up with stripped down versions of vehicles with none of the mod cons.

Italy’s Fiat is developing a new low-cost car. Its follows in the tracks of Renault with its Logan and Tata with its Nano. They are all betting on the fact that the no frills segment will grow significantly over the next few years.

The market for cars in the developed world is saturated so car makers are hoping to sell cars to those that haven’t got one yet in places like India, China and Brazil.

It’s a risk though. How easy will be it to get the price down far enough to tempt people to upgrade from their mopeds, rickshaws and tuks? The margins will inevitably be thin so sales will have to be large enough to bring in decent profits. Are larger vehicles the best solutions in those markets? And can you use the same model in several different markets — will the Nano work outside South Asia?

One interesting thought is there may also be demand in developed markets for low-cost cars as people tighten their belts and want to spend less on the initial outlay and running costs.

Do you think the car makers are right to bet on low-cost cars?

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Maria Giovanna Villari, Naples, Italy   May 26th, 2008 922 GMT

Max,
cars are not a status simbol any more.
Not for normal people, I would say, since too many fakes are around, and also because car models are too similar, so that I can’t distingue a Citroen from a Subaru and a Ford.
The most funny thing is that a fake Ferrari (made close to Naples, of course) do cost €. 20.000, and, in this case, sorry the boaster in me, I would go for it!
Maria Giovanna
ps I drive a Ford to help american economy!
pps I’ll be in Milan for the week, I’ll write you when I’m back.

Dan Hurt   May 26th, 2008 1202 GMT

Re-phrased are our views of cars shifting from status symbols to utility? Just looking at the US I believe it would be a good bet; with rising energy cost, food cost, and housing increases leaving less and less disposable dollars.

Jamie   May 27th, 2008 849 GMT

It looks like there’s no stopping the oil bull run. And with the poor state of the world economy, I would say yes it’s a good move by the car companies. But even better.. how about investing more in hybrid cars? Or for that matter, ANY means of alternative fuel? The first company that gets that right wins the lottery.

Thomas   May 27th, 2008 1557 GMT

Does anyone remember the Yugo? That brings back memories of a very similar period of low oil availability, growing gas prices, and economic threats from every conceivable market. My opinion is that this has happened before and will probably happen again. All the car manufacturers went on the small economic car bandwagon. As soon as the threat was gone we all returned to our old ways and large gas guzzling vehicles returned with gusto.

My question is do you think that we will actually get serious enough about changing our lifestyles to sustain this wave of conservation and alternative energy sources? Or will this just be another phase that will pass in time?

sam   May 27th, 2008 1750 GMT

How about mass transit? Keeps citizens i n good physical shape, keeps environment clean & pockets with more green!

Eduardo   May 27th, 2008 2222 GMT

Well, I can say something about this issue:

1) Poor people in developing countries dont care about global pollution since they think rich people in rich countries have the guilt for this problem and now they have the chance to have cars too.

2) Fuel prices have always been high in many of those poor countries, so when you offer a car for U$ 3.000 nobody cares about fuel prices. They just want to HAVE a car.

3) Cars, as mobile phones, are status objects.

navneet kamboj , Chandigarh , India   June 2nd, 2008 456 GMT

Well a car which costs less does not means that it would not occupy a place in the developed countries. If it is made for people who can not afford expensive cars does not means that rich should not or cannot buy it. Cars are no more a status symbol or style statement. At least these small cars would consume less gas/ oil as compared to their counterparts as a result would cause less pollution. They would be green for sure.

mirguet roland   June 12th, 2008 1018 GMT

smaller cars?useless as more than one billon could be added as emerging countries develop.the solution is bicycle there will be no other way but manufacturers will try to keep their ground.

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