World market for Low Cost Cars will be booming

“The early bird catches the worm” study carried out by the automobile experts department at Roland Berger predicts a worldwide boom of so-called low cost cars (LCC), i.e. cars of the lower price segment. Experts think that by the year 2012 about 18 millions of such cars may be sold. Not only is this development of interest to car manufacturing companies, but also to small and medium-sized companies which operate in the fields of car repair shops, car component supplies, tuning and car accessory manufacturing.

These cost-efficient compact cars will be successful given that many consumers in the United States and in Europe do not want to buy new expensive cars or because they just cannot afford them any more. Thus, they look for simple and cheap cars. In emerging countries, on the other hand, the purchasing power of consumers is strongly increasing which means that these people for the first time ever want to buy a car and surge onto the car markets.

The expert team at Roland Berger Strategy Consultants in a current study dealt with the subject of low cost cars (price below 10.000 Dollar or Euro). According to the team the number of such cars sold by the year 2012 could reach 18 million. Over the next six years this segment will grow by four million cars which represents a growth which is much more dynamic than that of the global car market as a whole. The Roland Berger experts screened the LCC segment in Europe, Japan, China, India, Brazil, Russia, South Korea and the United States. The main finding: The growth in China and India will by far be the strongest.

Another study on the China car market dating from the year 2004 which was prepared by the Mercer Management Consulting also provides very interesting figures. This study forecasts China to be the strongest growing market for medium-sized cars until 2010 and is available for free-of-charge-download.

MittelstandsBlog thinks: Whereas in particular Asia poses a growing threat to well-established European car manufacturers, low cost cars manufactured in Asia provide an additional opportunity to small and medium-sized European companies. Thus, imported cars need to be adapted and upgraded in order to meet the European liking and there are also related services which could provide new fields of activity to small and medium-sized European entities.