Friday, June 22, 2007

Another $3,000 Car in the Works

Business Week

It's official -- Renault and Nissan are working on designing a $3,000 car for the Indian market. That move will challenge India's Tata Motors for a slice of the fast-growing car market in India, which is expected to double by 2010. Tata is planning to unveil a bargain-basement car costing $3,000 next year.

In February, Renault-Nissan Chief Executive Carlos Ghosn hinted that he would pioneer an even cheaper car than the trail-blazing $6,000 Logan, which is built in Romania and other emerging markets. The Logan's sales are growing at a breakneck pace, and Ghosn aims to sell 800,000 a year by 2009. Yesterday Ghosn announced in Toyko that Nissan and Renault are exploring the concept together, since many consumers in India can't afford a car that costs more than $3,000.

Ghosn's game plan shows the global race to build really cheap cars is accelerating. Although these no-frills models will probably not be sold in Western Europe or the US, you can be sure that the innovations used to bring costs down will flow through the entire design and engineering chain at Renault and Nissan, helping them bring costs down across the board as they craft a new generation of no-frills models. The question now is: How green will they be. And who else will join the fray.

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