Wake Up, Detroit!

Get ready for the biggest car surge in recent memory.

Sales of 300 million expected over the next decade.

Wait, before you rush out to Detroit for a job, we should point out that this is not going to happen over here, it’s going to happen in India.

Already there are a half-dozen companies, including several joint ventures with Japanese companies and native companies who see this as a very real prospect.

The key is getting the cost down.

The average Indian is now riding to work on a motor bike; the next step up the ladder is an inexpensive car.

Bosch, the giant car parts company, says that the right price is to bring a car in under 7,000 Euros or about 9500 bucks American.

The Japanese and Indians, however, are targeting a car that will go for about 3,500 dollars.

American car companies, with all due apologies, are studying the matter.

We all know that Detroit will study it and study the prospect for a good inexpensive car until they miss the opportunity and then proclaim that all of these other companies are practicing unfair methods and ‘dumping.”

Bosch pegs the market at 300 million automobiles.

If you study the Indian market, you will see that 99% of all people want a car. The big problem is that they can’t afford a car at today’s prices.

Bosch’s studies also show that better than 13% of the world market will be for a car that falls into the 7000 Euro category.

Although strategists do not believe that the US would respond to such a strategy, this author believes that in the wake of wage cuts and lost opportunity, a reliable inexpensive car will appeal greatly to not only urban residents but also second car prospects.

China is also working hard to introduce cars in its own country that are priced at under 10,000 dollars US.

One footnote: If Detroit ever awakens from its deep slumber, it might find that realistically repositioning themselves to take advantage of a burgeoning market for affordable cars may be a way out of bankruptcy and a pragmatic way of making up lost market share….

Les Aaron with the “Avenging Rabbit “
For the Committee for Positive Change