We will soon see many new high fuel mileage cars from China and India. These Asian countries are rapidly expanding their production of cars and they are going to focus on the high fuel mileage market. China, amazingly, will become the worlds largest car producer this year. With lots of cheap labour to call on India and China are going to produce cars that will be very competitive on price and this means we might see small high fuel mileage cars breaking down the pricing barriers. The main problem these countries face is the level of quality they're able to deliver in a budget car. It remains to be seen whether their cars will appeal internationally.
The Chinese car industry will make almost 11 million vehicles this year. This will be more than both the US and Japanese and will make them the worlds largest car maker. This is incredible considering we currently don't see any Chinese cars on our roads - the vast majority of their cars are for local market. China hopes to change this. If China can break into the international market their car output will go through the roof. India produced 2.3 million cars last year, and are also rapidly expanding.
These 2 countries are currently positioned well for international growth because budget vehicles with high fuel mileage are one of the few growth areas in a struggling auto industry, and these are the type of cars they could easily produce. China and India can't compete with luxury high end cars such as BMW's and Mercedes, but they could take sales away from the car makers like Hyundai, Suzuki and Nissan. They just need to come up with some cheap good quality efficient cars.
I touched on the main point earlier - the key will be quality. Chinese and Indian brands have previously struggled in areas of quality and they desperately need to produce a few good cars to shake this image. No matter how cheap a car is or how great its fuel mileage, a certain level of build quality and safety needs to be reached otherwise it just won't sell internationally. China has a total of 47 car brands and while some produce modern good quality vehicles, many build very poor cars that have low levels of safety, build quality, handling and performance. Often cheap parts are used which aren't fit for the job. Some do not even return good fuel efficiency despite being small, and so are expensive to run despite being cheap to buy.
The next two years will be very important for China and India. A lot is riding on their next couple of cars to be released to the international market. If all goes well for them, we can expect to see a big shake up in the cheap high fuel mileage car market.