The global market for super-budget
cars is on the up, profits are potentially large and the big players want in. They
investigate.
There are two reasons why global car makers
are racing to build super-budget cars: healthy demand and potentially healthy
profits. By some estimates, more than eight million cars costing under $13,050
will be sold globally in 2013. China and India are the main markets for
super-budget cars, with South America and Russia close behind.
Why
the super-budget car is the next big thing?
Renault has been a pioneer in this arena,
launching the first new- generation Dacia models in 2004. The irony is that the
budget brand is said to be making premium-brand margins. Last year it was
claimed that Dacia had margins of nine per cent, while Renault’s mainstream
operation managed just 0.5 per cent.
There’s even more to come from Renault’s
sister company, Nissan, which will re-launch the Datsun name from a new Indian
factory in 2014 as a super-budget brand. And because Renault-Nissan will soon
have control of Russian maker Lada, Datsuns will be sisters to a new generation
of super-budget Ladas.
It will use a new platform being developed
at Renault-Nissan’s Indian technical center and said to be even cheaper to
produce than the one underpinning the Dacia family, allowing it to be sold for
$6,600. Renault-Nissan boss Carlos Ghosn has said that he would like to launch
a Datsun for the developing world that retailed for as little as $3,900.
Meanwhile, Volkswagen is putting the
finishing touches to a car for the Chinese market that should cost about
$8,100, come in two body styles and be sold under a new brand name. Speaking in
January, VW technical chief Ulrich Hackenberg said his engineering teams had
not yet hit the cost targets for the new car. “It’s a tough job, but not
impossible, and we’ve got the experience to do it,” he said. “If the design is
finalized this year, we can launch the car in two years.”
To drive costs as low as possible,
Hackenberg said not only would the car have to be built and partly engineered
in a low-cost country, but the materials would also have to be sourced locally,
and even the ‘second and third-tier’ components would have to be localized.
It’s thought that the platform will be, at least partly, the current-generation
Polo.
VW bosses are concentrating on creating the
first version of their super-budget car for China, where it would also be
built. A second version of the car will probably be engineered for India, where
it will also be locally produced.
Hackenberg said the final machine had to
look good and be something of which the owner would be proud. This might be a
reference to the utilitarian Tata Nano, which is priced from $2,550 but whose
sales have slowed to a trickle.
Fiat is also mulling over a budget brand,
according to boss Sergio Marchionne. A target price of $9,750 means that any
such car would be made outside of Europe, he said.
Driving down development, engineering and
assembly costs, while still being able to produce a modern and attractive small
car, present the biggest hurdles for any mass manufacturer who wants to get
into this booming segment. As well as executing the engineering work, sourcing
much of the materials and components in a low-cost country and, ideally, using
existing production facilities, most super-budget projects have also been
leveraging existing platforms.
However, Lotus Engineering is taking a
different approach. It argues that a ground-up rethink is necessary for the
creation of a successful super-budget car, rather than taking existing
engineering and production thinking and then trying to reduce costs.
Lotus believes the key to a profitable
super-budget car lies in dumping the conventional pressed steel body structure
and using a molded plastic floor-pan and fixed-position seats instead. We have
taken some of what was revealed by Lotus and combined it with a few ideas of
our own to show how the radical super-budget car of the future could be made
(above).
Lotus
believes the key to a profitable super-budget car lies in dumping the
conventional pressed steel body structure and using a molded plastic floor-pan
and fixed-position seats instead.
Greg Peterson, who is based at Lotus’s
facility in Michigan, said a “lighter and more cost-effective body-in-white”
means being able to have as many of the components integrated as possible and
reducing the amount of assembly needed in the factory. Using moldings and
simple stamped or extruded components can save significant amounts of money.
For example, Peterson says there are about
5000 welds in an average steel Monocoque, each of which costs 25 cents, or $250
per car. When you’re trying build a car that retails for $7500 (around $7,500),
that is a significant expense. Stamping steel is also wasteful, with a scrap
rate of about 25 per cent.
Peterson says this reduction in the number
of components should extend to the idea of a conventional dashboard. The
bulkhead itself can be molded into a useful shape and even the heater and
ventilation would lack any kind of cosmetic cover. The fixed seats also greatly
reduce the number of parts, the bases simply Velcroing to the floor molding and
the adjustable seatbacks also attaching directly.
Peterson says crash forces can be easily
handled by inexpensive ‘crush cans’ made from aluminum extrusions. Made in two
stages, for low-force and high-force impacts, they are attached directly to the
floor molding.
The theme of mixing materials and
construction methods to suit the individual component extends to the B-pillars,
which, Peterson says, should be made of high-strength steel. The A-pillar and
C-pillar structures could be made from aluminum extrusions or high-strength
steel tubes that are bent or Hydroformed Into shape. Again, the key is reducing
the parts count and using inexpensive techniques for construction.
12-month
rolling market share gain/loss (%)
While much of the super-budget car concept
requires expensive tooling for moldings, such as the floor-pan, one-piece front
end and rear quarter panels, this would be offset by lower fabrication costs,
no need for painting on the more basic versions and the fact that the car would
be built in huge production runs.
It would take considerable bravery for a
major car maker to ignore decades of embedded knowledge and take a completely
new approach to building a super-budget car. But with the sales volumes growing
rapidly in this sector, the maker that taps into the market with a decisive
cost advantage could clean up.
