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Old 31st July 2019, 10:45   #1
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Europe: Small cars to be axed due to low profitability

According to a media report, carmakers might discontinue sales of small cars in Europe due to stringent emission rules. It is said that due to their low retail price, it is too expensive to update the engines to reduce emissions. Bigger cars are said to have the margins that can cover these costs.

Europe: Small cars to be axed due to low profitability-vwpolovi2017erlkoenigmotorenpreisemarktstart1200x800c39cb18c8a4c2940.jpg

Reports suggest that PSA will be discontinuing the Opel Karl and the Opel Adam, while the future of the Peugeot 108 and the Citroen C1 is uncertain. Ford will stop sales of the India-built Ka+, which is likely to attract carbon-dioxide penalties in 2020. The Volkswagen Up, Seat Mii and the Skoda Citigo may also be discontinued and could be replaced by electric vehicles. The future of the Volkswagen Polo, Seat Ibiza, Skoda Fabia and the Audi A1 is also uncertain. Daimler is reported to be moving production and development of the Smart Car to China, leading to doubts on the Renault Twingo, which was developed alongside the Smart.

It is reported that small cars no longer offset the emissions produced by big SUVs and electric cars may be needed to meet the emission regulations. Ford and VW are collaborating to build electric cars based on the MEB platform. Ford is also expected to launch small SUVs like the Puma in Europe.

Source: Automotive News

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Last edited by ChiragM : 31st July 2019 at 10:55.
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Old 31st July 2019, 11:12   #2
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Re: Europe: Small cars to be axed due to profitability

I don't know about the others on the Forum, but it's downright heartbreaking to read this!

And if this development is true, then it would make no sense for a company such as VW to invest in production and assembly of the new Polo in India. Ford's KA+ will also meet its end soon, and one can assume that Ford will axe the Figo here in India at the end of its life cycle.

These are the cars that furthered the hot-hatch cause, and to see them meet their end in this fashion is not pretty.

But what hurts the most is the forced transition of the Ford Puma. What was once a compact sports car and a modern day fast-Ford is now a faux SUV! Heartbreaking!

This development establishes the fact that electric cars and hybrids are the way forward in the segment.
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Old 31st July 2019, 11:17   #3
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Re: Europe: Small cars to be axed due to profitability

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Originally Posted by suhaas307 View Post
I don't know about the others on the Forum, but it's downright heartbreaking to read this!.
Not really. Maruti 800 was never sold with a 200bhp engine, right. So small cars are for economy, and it makes sense to have hybrid and electric powertrains. OTOH, in big SUVs etc., the it make sense to continue with gasoline. So performance cars are not going away. Economy cars (a 100bhp polo is like a child dressed up as superman on halloween) are for economy and will choose the current economical choice, whether is is 3 cylinder auto rickshaw engine, or your electric powertrain.
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Old 31st July 2019, 11:36   #4
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Re: Europe: Small cars to be axed due to profitability

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Originally Posted by tsk1979 View Post
Not really. Maruti 800 was never sold with a 200bhp engine, right. So small cars are for economy, and it makes sense to have hybrid and electric powertrains. OTOH, in big SUVs etc., the it make sense to continue with gasoline. So performance cars are not going away. Economy cars (a 100bhp polo is like a child dressed up as superman on halloween) are for economy and will choose the current economical choice, whether is is 3 cylinder auto rickshaw engine, or your electric powertrain.
Hi TSK,

I think you've missed the spirit of my post entirely, not to mention the below portion from my post, extracted for your reference:

Quote:
This development establishes the fact that electric cars and hybrids are the way forward in the segment
I am not disagreeing with you. It is true that hybrid and electric powertrains are the way forward, and yes it does make sense for such cars to adopt such drivetrains whilst larger cars / performance cars.

This development would mark the end of an era, i.e. the gasoline powered hot-hatch. It also marks the end of the gasoline-powered compact sports car.

While such a development is good for the automotive industry insofar as emissions is concerned, it does not take away the fact that there is an entire car-community of compact hot-hatch fanatics that would not appreciate this. And that was the point I was trying to make.
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Old 31st July 2019, 11:45   #5
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Re: Europe: Small cars to be axed due to profitability

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Originally Posted by suhaas307 View Post

This development would mark the end of an era, i.e. the gasoline powered hot-hatch. It also marks the end of the gasoline-powered compact sports car.

While such a development is good for the automotive industry insofar as emissions is concerned, it does not take away the fact that there is an entire car-community of compact hot-hatch fanatics that would not appreciate this. And that was the point I was trying to make.
Unfortunately it does not. You can't end an era which does not exist. That era ended long time ago.
100bhp CIVIC in 1990s was a hot hatch when 100bhp/tonne was a great power to weight ratios. Today's hot hatches are just slightly souped up hot hatches. A midsize family saloon will run rings around such hatches and an entry level electric will burn them in quarter mile.

I am hoping that hybrid/electric powertrains bring back the hot hatch. Eg for mid size price Tesla gives you 6s 0-60mph
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Old 31st July 2019, 11:46   #6
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Re: Europe: Small cars to be axed due to profitability

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Originally Posted by suhaas307 View Post
I don't know about the others on the Forum, but it's downright heartbreaking to read this!

And if this development is true, then it would make no sense for a company such as VW to invest in production and assembly of the new Polo in India.

This development establishes the fact that electric cars and hybrids are the way forward in the segment.
VW group discontinuing their entry level petrol models (VW up, Skoda Citigo, Seat Mii) is already announced some time back. All these will be replaced with full-electric models only with good range of ~250 KMs. Initially price of these EVs will be high but over the next 2-3 years price will come down drastically due to declining battery prices and competition.

I am also wondering why is VW investing so much money (~2,000 crores) on ICE vehicles in India as part of their India 2.0 plan. By the time they develop their new 2.0 plan and new platform, Hyundai, TATA, MG, etc.. will be releasing relatively affordable EV models.
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Old 31st July 2019, 12:41   #7
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Re: Europe: Small cars to be axed due to profitability

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Unfortunately it does not. You can't end an era which does not exist. That era ended long time ago.
100bhp CIVIC in 1990s was a hot hatch when 100bhp/tonne was a great power to weight ratios. Today's hot hatches are just slightly souped up hot hatches. A midsize family saloon will run rings around such hatches and an entry level electric will burn them in quarter mile.

I am hoping that hybrid/electric powertrains bring back the hot hatch. Eg for mid size price Tesla gives you 6s 0-60mph
Again, you've entirely missed the point, but that's okay.

What according to you is a hot hatch? How would you define it? A hatch that has 200 bhp? 300? Or is it something else entirely?

Are you aware of the VW UP! GTI? Or even the Renault Twingo GT (rear engined rear wheel drive and only 100 odd horsepower)?

These cars were introduced only a few years ago (middle of this decade to be exact) and not in the mid '90s when the era apparently ended.

Do you not consider these cars as hot hatchbacks just because they have 100 odd horsepowers?

Let me put it this way, can I consider the Jimny a lesser SUV in terms of its capability just because it has a small engine? I don't know much about off road cars, but I certainly believe outright horsepower and 0-60 times aren't the yardsticks to measure a hot hatch or SUV.

Your mid size family sedan may be able to run rings around these small cars, and entry level electric cars will definitely "burn" them in a quarter mile, but that's not the point or purpose of these compact hot hatchbacks anyway.

But you know, there are hot hatchbacks that will show most midsize sedans and even some supercars the door. Have you heard of the Golf R, or the Focus RS?

I maintain that I agree with you, electric powertrains are what will eventually find their way into small and compact cars. And they will be faster, more economical and definitely a lot easier to maintain, not to mention better for the environment (subject to the source of electric power of course).

EDIT: Electric cars in the performance space still have a long long way to go. Sure, they can do 0-100 in 2.5 seconds and destroy Lamborghinis and Porsches on a drag strip, but catch these electric doing 60 laps in 1 hour without breaking a sweat.

Efficient cooling still poses a huge challenge to performance oriented affordable electric cars. It will still be a while before we see a reliable electric sports car that can be driven to a race track, do 100 laps and then be driven back home like it's just another day. That said, I'm sure the day isn't too far away.

Last edited by suhaas307 : 31st July 2019 at 12:56.
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Old 31st July 2019, 12:53   #8
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Re: Europe: Small cars to be axed due to profitability

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Originally Posted by suhaas307 View Post
Again, you've entirely missed the point, but that's okay.

What according to you is a hot hatch? How would you define it? A hatch that has 200 bhp? 300? Or is it something else entirely?

Are you aware of the VW UP! GTI? Or even the Renault Twingo GT (rear engined rear wheel drive and only 100 odd horsepower)?
Nope I did not miss that point. Why can't the golf GTI come with an electric powertrain. Just because it does 0-60mph in 5 seconds will disqualify it from being a hot hatch?

Focus RS etc., all can have electric powertrains. So hot hatches are not going away, they are just becoming faster and going electric
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Old 31st July 2019, 13:03   #9
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Re: Europe: Small cars to be axed due to profitability

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Why can't the golf GTI come with an electric powertrain.
It does. Except it's a PHEV with the 1.4 TSI engine. Golf GTE. Doesn't retail in the US.
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Old 1st August 2019, 09:31   #10
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Re: Europe: Small cars to be axed due to low profitability

Damn, small cars are really having it tough. In the USA, forget small cars, even regular sedans are being abandoned by car makers such as Ford due to slim margins / lack of profitability. And now this news from Europe.

It appears that Asia will be the only large market for small cars. And I might add, Japanese & Korean car manufacturers will lead product in this segment. VW though will continue to offer small hatchbacks to satisfy our "European" cravings.

You better be tough if you are an automotive CEO today. The industry is undergoing seismic changes, the likes of which have never been seen before.
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Old 1st August 2019, 09:59   #11
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Re: Europe: Small cars to be axed due to low profitability

Does it mean the end of good cars for India too? All platforms for common models (even with a few features less) are well-engineered cars. Consider the top-selling cars today-Hyundai i10, i20, Honda Jazz/City, Suzuki Baleno, Suzuki Swift, Ford Figo, Fiat Punto, VW Polo, etc.

If the car makers don't see potential in Europe, it's bad news for the Indian market too as we'll get worse cars at even higher prices.
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Old 1st August 2019, 10:27   #12
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Re: Europe: Small cars to be axed due to low profitability

Unprecedented market conditions are being faced by manufacturers today.
The need to save the environment has assumed massive propositions and a manufacturer even if not sold on the reality that the environment is burning cannot openly come out with cars perceived to detrimental to the environment.
Cars cannot be eliminated and we are still centuries away from flying buses and trains.
So electric and hybrid is the only way forward.
This transition will eventually sound the death knell for a lot of beloved cars across markets.
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Old 1st August 2019, 10:30   #13
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Re: Europe: Small cars to be axed due to low profitability

This is real bad news. I was hoping we'd start seeing some premium compact hatches from Europe in our market. For the self driven, feature laden and well engined luxury hatches hit the sweet spot especially when one has to do a daily commute in crowded cities like Bangalore with its zillion U turns and hidden internal roads where your extra dimensions can be very taxing.
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Old 1st August 2019, 13:37   #14
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Re: Europe: Small cars to be axed due to low profitability

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Originally Posted by GTO View Post
You better be tough if you are an automotive CEO today. The industry is undergoing seismic changes, the likes of which have never been seen before.
This part is absolutely true. There was a consulting firm that predicted this trend in 2016. Small cars and medium cars will become expensive to see profits because their development is limited, frequent and costly. They also predicted that the proportion of IC small cars will reduce in the future with emphasis being laid on three modes of commercial travel - city, intercity and tour. I will fish out that article if I can. It was on a public domain, so its not copyrighted.

On a bigger note, I see this a positive of sorts because, in my opinion, development of an automobile, as we know it, has "stagnated" since the late 80s and early 90s. We look at 1000s of cars every day. Whats different about them? Same 2 headlamps, a bonnet, 4 wheels, two taillights, possibly a boot door, a 2/4 door occupant cell, 2 big glasses in the front and rear and other stuff. They are "technically" the same. Just designed and optimised in a 1000 different ways. But they are also heavily controlled. Designs of the bumper, bonnet, headlamp, occupant cage, seats, engine, glass size, tires etc are all heavily regulated by law. So the boundaries of what a car is capable of, is already defined. We are already at that stage. How does an OEM grow and improve beyond this? Focus on weight saving and cost effective development. But its not really ground breaking in terms of what was done in the 70s, 80s and possibly, even the 90s.

Which is why, the next big thing in an automobile will be disruptive. As roads and infrastructure continue to grow, disruptive technologies like c2x communication, autonomous driving and electromobility will shape the future of commercial travel. So expect a siege of alternative drivetrains from the small car platform that will form the basis of the city car.

Last edited by VaidhiR : 1st August 2019 at 13:39.
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Old 1st August 2019, 13:58   #15
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Re: Europe: Small cars to be axed due to low profitability

Bad news on auto sector is flowing one after another.

Mainstream all-electric mass market small cars are sill a distant proposition.

The good news is that our little Polo is not going anywhere soon. It can easily have 10 more year product life cycle with the current 3 pot and then 2 pot and eventually mono pot before having a legendary death (obviously BS6)

Hope in India Maruti, Hyundai (Kia) and Renault will continue offer fossil fuel mass market small cars for at least 10 more years before alternate technology catch up in a big way.

Fingers tightly crossed.
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