Low cost car segment : Trends on local and global markets

Abstract

The automotive world is changing. New technologies, new driving assistance functions, autonomous driving. Electrical car seems to be the future. But are all these things really necessary if we only need to go from one point to another? Many years ago Mr. Henry Ford made a bet: to offer mobility and freedom to everybody. Is this need still valid today? When you think about modern stories of Dacia or Tata Nano, the answer may be yes. Ford Model T was replaced in our times by the affordable car, also known as the low cost car. We will present in this thesis the premises of the low cost car introduction, the low cost car market specifics as well as the most famous examples of low cost cars that are already milestones in the history of automotive industry. We will define and analyze the most influencing factors of the car buyers' decision in three different scenarios in order to find the answer to one question: is there any future for the low cost car market in a medium term? And moreover, taking into account the current changes within urban mobility sector? Until 2025 many changes will happen that will shape our mobility perspectives. Starting with the first chapter, we will take a brief look at the automotive sector in order to find out the most favorable market for the low cost and ultra-low cost cars. How affordable must be an affordable car in term of price and for which category of customers? We have already a couple of examples with models that defined the modern low cost car concept: Dacia from Renault and Nano from Tata. In the second chapter we will see their path from design to manufacturing, their specifications and we will find out if they have been successful or not. It is now time to check the future perspectives of this car segment. But how it will be the future? As it is getting harder to predict it, we will analyze the trend taking into consideration three evolution scenarios based on the so called 'megatrends' that are shaping the automotive industrys future. Each and every scenario (High Tech, Budget and Sustainable) has its own implications in the industry, starting with the markets, customers, products or business models and finishing with the business organizations and their employees. Next step would be to identify the factors that are influencing car buyers' decision in general and to define which factors have an impact on the potential low cost car customers. Finally, we will have the elements that predict the future of the segment, by combining the evolution of the most impacting factors in all three future evolution scenarios.