The auto industry isn’t in an easy spot these days. First world nations are reaching a critical mass of automobiles, and stringent regulations add weight and cost to cars just as consumers are demanding cheap and fuel efficient vehicles.
But Nissan seems up to the challenge, as their next big move is building a car to sell in developing nations for between $3,000 and $5,000.
Wealth inequality is a big issue in America, but the fact is if you live in the USA you are among the global population’s 1%, almost regardless of income. Most of us spend more on cellphone plans in a month than some poor families spend on food in a year. Yet at the same time, many developing nations are seeing a rise in their middle class as major corporations move to countries to take advantage of low wages and a lack of regulation.
Nissan wants to tap into this growing middle class by building a cheap, no-frills vehicle under the Datsun brand. Think of it like the Ford Model T 2.0. No air conditioning, power nothing, a small motor with just enough power to get around, and most importantly, rugged reliability. Most developing nations lack a large pool of experienced mechanics or even a decent highway infrastructure, so any cheap car will have to deal with some pretty harsh conditions.
Indian Automaker Tata ried to do something similar with their $2,500 Nano, but quality issues (including fires!) have really hampered early sales. That said, sales of the Nano have rebounded substantially, with September 2012 sales nearly double that of September 2011, but the Nano has yet to hit critical mass, leaving the door wide open for a competitor to slip in. There are rumored to be electric, hybrid, and even compressed air versions of the Nano in the works, but none are yet for sale in India.
Unfortunately, selling such a cheap car here in the U.S. would be all but impossible given today’s the strict government safety and emissions regulations. However, once upon a time, Datsun sold some cheap-but-well-made vehicles in America, including a pickup with a 1.0 liter, 37 horsepower engine, and the Datsun 510 sedan (pictured above). But in developing nations, these roadblocks are all but non-existent. But does the world really need more cars soaking up our limited oil resources? What is the point of building a cheap car if the owners can’t afford the petrol to power it?
A better idea might be building cheap cars with region-specific powertrains. Electric vehicles could be used on small island nations, while natural gas or propane might be better for countries like Iraq or India. Then again, how much emissions can a small, 3-cylinder gas engine really make?
Regardless, Nissan’s efforts to build smaller, cheaper cars could have an impact across the whole auto industry. There is definitely a “back-to-basics” mindset for many people of my generation, and a cheap, simple car COULD be sold in America…just not for $3,000.
Source: The Wall St. Journal