Low-cost car sector tipped for growth

The market for low-cost cars is set to undergo significant expansion in the coming years as buyers focus on affordability rather than performance or appearance, a new survey has claimed.

According to a study by consultants Roland Berger, the number of cars worth £6,700 or less across international markets will approach 18 million units by 2012.

This represents growth of four million cars across the course of six years.

Roland Berger’s Win Van Acker, co-author of the report, said: “The segment is booming and is going to change the automotive sector.”

Ralf Kalmbach of Roland Berger added: “Buyers on a tight budget are soon going to have a lot more choices.”

Increased choice is expected to be one of the main effects of the growth in the low-cost car segment, as the authors of the report stated that its expansion was not likely to cause prices to decrease across the whole market.

Many automakers are believed to have noted the trend and have designed affordable models to take advantage of it – examples being the Toyota Aygo, the Volkswagen Fox and the Renault Dacia.

This is despite the fact that it is notoriously difficult to produce low-cost quality cars for mass sale yet still make a profit.

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