World Automakers Race for $3,000 Cars

You may not know it, but the race is on to sell new cars for less than $3,000. The cars — small, no-frills subcompacts — are already selling in places like India and Eastern Europe at prices in the $7,000 range. Among them are the Renault Logan (Renault and Nissan have a joint alliance with each one owning the others shares), and the Hyundai Santro, which sells for $6,300 in India. The Logan is so popular, two plants work 24 hours a day and still can’t keep up with demand.

The next hurdle is the $3,000 mark, and India looks to be the testing ground. Will these low-cost cars ever make it to the U.S.? It’s doubtful we’ll see any cars with such small profit margins come our way, but there could be a trickle-down effect; we may not get a $3,000 model, but a better-equipped $7,000 one from Hyundai, Nissan or Suzuki isn’t outside the realm of possibility.

[The Race To Build Really Cheap Cars, BusinessWeek Online]