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Economy car
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An economy car is an automobile that is designed for low cost operation. They are designed for drivers who use their car primarily for personal transportation. The best of these cars are not merely cheapened or miniaturised versions of a conventional car, but instead they are designed by taking a fresh look at how to meet their design requirements, and even at the changing of those design constraints themselves.
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Encyclopedia
An economy car is an automobile that is designed for low cost operation. They are designed for drivers who use their car primarily for personal transportation. The best of these cars are not merely cheapened or miniaturised versions of a conventional car, but instead they are designed by taking a fresh look at how to meet their design requirements, and even at the changing of those design constraints themselves. Typical economy cars are small, light weight, and inexpensive to buy. The size of a 'small car' (and so economy car), was until recently, larger and heavier in the USA than in the rest of the world.
History
Pre-war
At the birth of the car, in the 1890s and into the first decade of the twentieth century, it was considered a replacement for the carriages of the rich, or simply a dangerous toy, that annoyed and inconvenienced the general public. The book Wind in the Willows, pokes fun at early privileged motorists. The first car to be marketed to the (well off but not rich) ordinary person and so the first 'economy car', was the 1901-1907 Oldsmobile Curved Dash - it was produced by the thousands. It was inspired by the buckboard type horse and buggy, (used like a small two seat pickup truck) popular in rural areas of the U.S. It had two seats, but was less versatile than the vehicle that inspired it.
Although cars were becoming more affordable before it was launched, the 1908-1927 Ford Model T is considered to be the first true economy car, because the very few previous vehicles at the bottom of the market were 'horseless carriages' rather than practical cars. The major manufacturers at the time had little interest in low-priced models. The first 'real' cars had featured the FR layout first used by the French car maker Panhard and so did the Model T.
Henry Ford declared at the launch of the vehicle - I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be low in price that no man making a good salary will be unable to own one - and enjoy with his family the blessing of hours of pleasure in God's great open spaces.
Ford's Model T was a large scale mass produced car, that very innovation, along with the attributes it required (a simple, inexpensive design) allowed it to be the first car to exemplify the ideals of the economy car. The complexity involved in making it a successful design was in its production and materials technology; particularly the use of new vanadium steel alloys. The River Rouge Plant where it was made, (opened mid-way through the Model T production run), was the most technologically advanced in the world, and the leading example of the Taylorism school of scientific management. The innovation of the moving production line, was inspired by the 'dis-assembly' plants of the Chicago meat packing industry, reduced production time from twelve and a half hours, to just an hour and thirty-three minutes per car. The continuous improvement of production methods, and economies of scale from larger and larger scale production, allowed Henry Ford to progressively lower the price of the Model T throughout its production run. It was far less expensive, smaller, and more austere than its hand-built pre-first world war contemporaries. The size of the Model T was arrived at, by making its track to the width of the ruts in the unsurfaced rural American roads of the time, ruts made by horse drawn vehicles. It was specifically designed with a large degree of axle articulation, and a high ground clearance, to deal with these conditions effectively. It had an under stressed engine. It set the template for American vehicles being larger than comparable vehicles in other countries, which would later on have economy cars scaled to their narrower roads with smaller engines.
In 1911 in Europe, Ettore Bugatti designed a small car for Peugeot, the 850 cc four-cylinder Type 19 "Bébé".
In 1914 Ford was producing half a million Model Ts a year, with a sale price of less than US$500. This was more than the rest of the U.S. auto industry combined and ten times the total national car production of 1908, the year of the cars launch.
At the New York Motor Show in January 1915, William Durant the head of Chevrolet (and founder of GM), launched the Chevrolet Four-Ninety, a stripped down version of the Series-H, to compete with Henry Ford's all conquering Model T, it went into production in June. To aim directly at Ford, Durant said the new car would be priced at $490 (the source of its name), the same as the Model T touring. Its introductory price was $550, however, although it was reduced to $490 later when the electric starter and lights were made a $60 option. Henry Ford responded by reducing the Model T to $440.
The subsequent decades led to economical cars that reflected the needs of their creators. The cycle car was an attempt in the period before 1922 in the post First World War austerity period, as a form of "four-wheeled motorcycle", with all the benefits of a motorcycle and side-car, in a more stable package. Crosley, a U.S. appliance manufacturer, would also be an early pioneer of very small cars.
In 1923 Chevrolet tried again with the Chevrolet Series M 'Copper-Cooled', air cooled car, designed by General Motors genius engineer at AC Delco Charles Kettering, it was a rare failure for him, due to uneven cooling of the inline four cylinder engine.
But by far, the most development occurred in Europe. There was less emphasis on long-distance automobile travel, a need for vehicles that could navigate narrow streets and alleys in towns and cities (many were unchanged since medieval times), and the narrow and winding roads commonly found in the European countryside. The Citroën Type A was the first car produced by Citroën from June 1919 to December 1921 in Paris. Citroën had been established to produce the double bevel gears that its logo resembles, but had ended the First World War with large production facilities, from the production of much needed artillery shells for the French army. Andre Citroen was a keen adopter of U.S. car manufacturing ideas and technology in the 1920s and 30s. He re-equipped his factory as a scaled down version of the Ford River Rouge Plant, that he had visited in Detroit Michigan. It was advertised as "Europe's first mass production car." The Type A reached a production number of 24,093 vehicles. The Opel 4 PS, Germany's first 'peoples car', popularly known as the Opel Laubfrosch (Opel Treefrog), was a small two seater car introduced by the then family owned auto maker Opel, early in 1924, which bore an uncanny resemblance to the little Torpedo Citroën 5 CV of 1922.
On an even smaller scale, European cars, such as the 747cc Austin Seven, (which made cyclecars obsolete overnight), would also start to catch on in Japan during the same time period, as a Datsun, leading to the start of their own automobile industry. It was also produced by BMW in Germany, Rosengart in France, and by Bantam in the U.S.
Also, in the 1920s, Ford (with the Model T in Manchester, England) and General Motors, (who took over Opel in Germany and Vauxhall in Britain), expanded into Europe. Most Ford and GM European cars, but especially economy cars, were technologically conservative and all were rear wheel drive to a smaller European size, with improvements focused mainly on styling, (apart from the introduction of the 1935 monocoque Opel Olympia, and the Macpherson strut by Ford in the 1950s/60s), until the late 1970s/early 1980s.
In the late 'roaring' 1920s, General Motors finally overtook Ford, as the US new car market doubled in size, and fragmented into niches on a wave of prosperity, with GM producing a range of cars to match. This included a Chevrolet economy car that was just an entry level model for the range of cars. It was only a small part of the marketing strategy - "A car for every purse and purpose" of GM head Alfred P. Sloan. Sloan introduced the annual model change, which moved cars from being utilitarian items to fashionable status symbols - that needed regular replacement to keep up with the Joneses. It was funded by high interest/low regular payments consumer credit, as was the 1920s boom in other consumer durable products. Henry Ford was wrong-footed by staying with the one size fits all, "any colour you like as long as it's black", Model T for far too long. The 'one model' policy had nearly bankrupted the Ford Motor Company. By the end of production in 1927 it looked like a relic from another era. It was replaced by the Model A.
In 1929 Chevrolet replaced the Chevrolet Straight-4 engine that dated from 1913, with the Chevrolet Straight-6 engine or 'Stovebolt 6', that was to last until the 1970s as Chevrolet's base engine. A few years later Ford developed the Model A with the Ford flathead V8. The 1932 Model B coupe became the car of choice for post war hot-rodders. It was the first V8 engine in a low priced car, and along with the Chevrolet 6, clearly showed how the U.S. was diverging from the rest of the world, in its ideas about what constituted a basic economy car.
In 1928 German motorcycle manufacturer DKW launched their first car, the P15, a rear wheel drive, wood and fabric bodied monocoque car, powered by a 600cc an inline two-cylinder two-stroke engine.
In 1931 the DKW F1 was launched. This was the first mass produced front wheel drive car in the world. It featured a front-engine, front-wheel drive layout using a water cooled 494cc or 584cc transverse two stroke engine with chain drive. This was developed through the 1930s into the 1938 F8 model and the F9 that was not put into production because World War II started. By this time DKW had become the largest manufacturer of motorcycles in the world. Their two-stroke engine technology was to appear in the postwar products of Harley-Davidson, BSA, Trabant, Wartburg, Saab, and Kawasaki.
In the 1930s, Fiat in Italy produced the advanced and very compact Topolino or 'little mouse', the precursor of the 1950s Fiat 500. It was a similar size to the Austin Seven, but much more advanced than the Seven which was produced with updated and restyled body until World War II, and still on the early 1920s chassis.
The Volkswagen Beetle would be the longest-lasting icon of this 1930s era. Adolf Hitler admired the ideals exemplified by the Ford Model T, and sought the help of Ferdinand Porsche to create a 'peoples-car' - literally Volks-Wagen, with the same ideals for the people of Germany. Many of the design ideas were plagiarised from the work of Hans Ledwinka, the Tatra T97 with the Czechoslovakian Tatra (car) company. The Nazi "KdF-Wagen" ("Strength through Joy - Car") program ground to a halt because of World War II, but after the war, the Volkswagen company would be founded to produce the car in the new democratic West Germany, where it would be a success.
It is important to realise that the pre-war European car market was not one market. Trade barriers meant that it was fragmented into national markets, apart from luxury cars where the extra cost of tariffs could actually make cars more exclusive and desirable. The only way for a car maker to enter another national market of a major European car making country, (and their colonial markets of the time), was to open factories there. For example, Citroen and Renault opened factories in England in this period. This situation only really changed with the post-war growth of the EEC (European Community) and EFTA. In Britain in particular the RAC (Royal Automobile Club) horsepower taxation system, had the secondary function of excluding foreign vehicles. It was specifically targeted at the Ford Model T, which the then government feared would wipe out the fledgling indigenous motor industry. It crippled car engine design in Britain in the inter-war period, and was abolished after World War II as part of the British export drive for desperately needed, hard foreign currency, because it made British cars uncompetitive internationally.
1945-1970s
As Europe and Japan rebuilt from the war, their growing economies led to a steady increase in demand for cheap cars to 'motorise the masses'. Emerging technology allowed economy cars to become more sophisticated. Early post-war economy cars like the VW Beetle, Citroën 2CV, Renault 4CV and Saab 92, looked extremely minimal, but technically they were extremely advanced.
- The VW featured an air cooled rear engine with rear wheel drive, all round fully independent suspension, semi monocoque construction and the ability to cruise on the Autobahn for long periods reliably. This cruising ability and engine durability was gained by restricting the engine breathing and performance to well below its maximum capability.
- The Citroën 2CV had interconnected all round fully independent suspension, rack and pinion steering, radial tyres and front wheel drive with an air cooled flat twin engine. It was some 10 to 15 MPG more fuel efficient than any other economy car of its time - but with restricted performance to match. It was specifically designed to motorise rural communities where speed was not a requirement. The original design brief had been issued before the Second World War in the 1930s.
They were technologically more advanced than almost all conventional cars of the time.
Also in the immediate postwar period, the monocoque Morris Minor launched in 1948. It had a strong emphasis on good packaging and roadholding, with rack and pinion steering and American influenced styling, but was otherwise conventional. It was designed by Alec Issigonis.
In 1957 FIAT in Italy launched the Nuovo Fiat 500. It was the first real city car. It had a rear mounted air cooled vertical twin engine, and all round independent suspension. It was for Italian scooter riders who had settled down and had a young family. Fiat also launched the larger Fiat 600 with a similar layout but with a watercooled inline 4 cylinder engine, it even had a people carrier / MPV / mini-van version called the 'Multipla'.
In the late 1950s the DDR German Democratic Republic produced its 'peoples car'. The Trabant sold 3 million vehicles in thirty years due to its communist captive market. It had a transverse two-cylinder air-cooled two-stroke engine and front wheel drive, using DKW technology.
The next big advance was the 1959 Austin Mini from the British Motor Corporation, designed by Alec Issigonis as a response to the first 'oil crisis', the 1956 Suez Crisis, and the boom in bubble cars and Microcars that followed. It was the first front wheel drive car with a watercooled inline four cylinder engine mounted transversely. This allowed eighty percent of the floor plan for the use of passengers and luggage. The majority of modern cars use this configuration. Its progressive rate rubber sprung independent suspension (Hydrolastic 1964-1971), low centre of gravity, and wheel at each corner with radial tyres, gave a massive increase in grip and handling over all but the most expensive cars on the market.
In the 1960s the Renault 4 (arguably the first small five door hatchback, but viewed as a small estate car / station wagon at the time) was launched in France. In layout it was essentially an economy car version of the Citroen Traction Avant. Citroen responded with the 2cv based 1960 Citroen Ami and hatchback 1967 Citroen Dyane. Also in France, in 1966 Renault launched the midrange Renault 16 - although it was not an economy car it is widely recognised as the first hatchback car. The hatchback was a massive leap forward in practicality. It was adopted as a standard feature on most European cars, with saloons declining in popularity apart from at the top of the market over the next twenty years. Small economy cars that were more limited in load carrying ability than larger cars benefited most - long light loads like furniture could be hung out of the back of the car.
The Toyota Corolla, Datsun Sunny refined the conventional small rear wheel drive economy cars as postwar international competition and trade increased. Japan also codified a legal standard for extremely economical small cars, known as the keicar. Japan also instituted the 'Shaken' roadworthiness testing regime, that required progressively more expensive maintenance, involving the replacement of entire vehicle systems, that was unnecessary for safety, year on year, to devalue older cars and promote new cars on their home market that were available for low prices. There are very few cars in Japan more than five years old.
In 1964 FIAT designed the first car with a transverse engine and an end on gearbox - the Autobianchi Primula, that was developed into the Autobianchi A112 and Autobianchi A111. They were only sold in mainland Europe, where they were popular for decades, but virtually unknown in the UK. The 1967 Simca 1100 (who had previously used FIAT technology under licence), the 1969 Fiat 128, and the 1971 Fiat 127 regarded as the first 'super-mini' brought this development to a wider audience. This layout gradually superseded the gearbox in the engine's sump of BMC Austin Morris and later Peugeot PSA X engine, until the only car in production with this transmission layout by the 1990s, was the then long obsolescent Austin (Rover) Mini.
The 60s also saw the swansong of the rear engined rear wheel drive car: with the introduction of the Hillman Imp - UK, the relatively unsuccessful attempt at diversification of the Volkswagen Type 3, Volkswagen Type 4, and there was also the NSU Prinz - West Germany, the Renault 8 and Simca 1000 - France, the Chevrolet Corvair - USA. In Communist Eastern Europe there was the Škoda 1000MB/1100MB that was developed into the 70s Škoda S100/110 and then the 70s/80s Škoda 105/120/125 Estelle - Czechoslovakia, and the comically poor Ukrainian made Zaporozhets - USSR. This layout had better interior space utilisation than front engine rear wheel drive cars, and a better ride than those with a live rear beam axle. It was an affordable way to produce a car with all independent suspension, without the need for expensive constant-velocity joints needed by front wheel drive cars, or axle arrangements of FR layout cars. But, they could have serious roadholding issues due to unfavourable weight distribution and wheel camber changes of cheaper swing axle rear suspension designs. These problems were fixed on later versions of the Beetle and Corvair for example, but their reputations were damaged.
While economy cars flourished in Europe and Japan, the booming postwar American economy combined with the emergence of the suburban and interstate highways in that country led to slow acceptance of small cars. Brief economic recessions saw interest in economical cars wax and wane. During this time, the American auto manufacturers would introduce smaller cars of their own, in 1950 Nash Motors introduced the Rambler designed to be smaller than contemporary cars, yet still accommodate five passengers comfortably. Nash also contracted with British Motor Corporation to build the American designed Metropolitan using existing BMC mechanical components, (the engine is a BMC B-Series engine also used in the MG MGA and MG MGB). The 1960s brought the Chevrolet Corvair, Ford Falcon, and Plymouth Valiant into the market segment dominated by the Rambler. These vehicles were still much larger than the ones enjoying popularity in Europe and Japan, however. Imported cars began to appear on the U.S. market during this time to satisfy the demands for true economy cars. An initial late 40s/early 50s success in a small way, was the monocoque Morris Minor launched in 1948, with its miniaturised Chevrolet styling. It was underpowered for the long distance roads of the US and especially the Freeways that were starting to spread across the country in the 1950s. The first British Motorway didn't open until 1959. BMC preferred to develop the higher profit margin MGs for the American market and also worked with Nash and so passed on the opportunity. The Volkswagen Beetle using clever and innovative advertising and capitalising on its very high build quality, durability and reliability, was a spectacular success. Having been designed for cruising the Autobahns, Freeways were no problem for it. It disproved the scepticism of American buyers as to the usefulness of, by their standards, such small cars. Initially the stylish Renault Dauphine derived from the Renault 4CV, looked like it would follow the VWs footsteps, but then was a dismal failure due to mechanical breakdowns and body corrosion. This failure on the U.S. market in the late 1950s, may have significantly harmed the acceptance of small cars generally in America.
The launch in the 1960s of the Mini Cooper to exploit the phenomenal chassis of the Austin Mini, along with its massive success in rallying, (Monte Carlo Rally in particular) and circuit racing, first showed that economy cars could be very effective sports cars and made the likes of the MG Midget look old fashioned overnight. The old tech rear wheel drive Ford Lotus Cortina and Ford Escort 1300GT and RS1600, along with the Vauxhall Viva GT and Brabham SL/90 HB in the late 1960s opened up this market still further in Britain. Meanwhile, from the 1950sAbarth tuned Fiats and Gordini tuned Renaults did the same in Italy and France.
Car body corrosion was a particular problem from the 1950s to the 1980s when cars moved to monocoque or uni-body construction (starting from the 1930s), from a separate Body-on-frame chassis made from thick steel. This relied on the shaped body panels, designed on newly available computers (from the 1960s), and the integrity of the body-shell for strength. A light car was a fast and/or economical car. Unfortunately the design of corrosion prevention (rustproofing), had not kept pace with this new technology.
1970s-1990s
The oil crisis of 1973 caused a great deal of renewed emphasis to be placed on economy, especially in the United States with its greater distances, arguably the nation hardest hit because of their oversized cars with large inefficient engines, that were traditionally understressed for reliability and durability. This was made worse by new emissions and safety legislation. The sales of imported economy cars continued to rise inexorably. throughout the sixties, seventies and eighties. The hasty response by US car makers included the AMC Gremlin, Chevrolet Vega, Ford Pinto and Chevrolet Chevette that were popular American-made economy cars that sold well over six million to undemanding patriotic Americans in the seventies and eighties. When compared to the best from Europe and Japan, they showed just how far behind in the design and technology of small cars US car makers had fallen. They were poorly developed and packaged rear wheel drive cars.
- The Chevrolet Vega had engines that self destructed after consuming large amounts of engine oil and bodies that rusted out spectacularly. Eight miles into a test run on GM's proving track, a Vega literally fell apart, as related in a book by John DeLorean recalling his days as head of Chevrolet.
- The Pinto made the TIME magazine 'The 50 worst cars of all time list'. They shoot horses, don't they? Well, this is fish in a barrel. Of course the Pinto goes on the Worst list, but not because it was a particularly bad car — not particularly — but because it had a rather volatile nature. The car tended to erupt in flame in rear-end collisions. The Pinto is at the end of one of autodom's most notorious paper trails, the Ford Pinto memo, which ruthlessly calculates the cost of reinforcing the rear end ($121 million) versus the potential payout to victims ($50 million). Conclusion? Let 'em burn.
- The second 1970s General Motors project to design an economy car for the US market, the Chevrolet Chevette was more successful, because it was an adapted and uglified design from experienced, (but technologically conservative) small car designers OPEL, GMs German subsidiary; the Opel Kadett C. Ford also did this, in the 1980s with the Ford Escort. The Auto Editors of Consumer Guide said, In its dozen years on the market, Chevette had earned a reputation for being a simple, straightforward car offering high fuel economy and steadfast reliability. But it also suffered from a cramped interior, poor ride and handling (at least by a mid-1980s yardstick), lazy acceleration (by any yardstick), and a lack of general refinement. Still, it left in its wake a sea of happy owners, and many no doubt mourned its passing.
The other response by U.S. car makers to the increase in popularity of imported economy cars in the 1970s and 80s was called 'captive imports'. These were cars bought from overseas subsidiaries or from companies in which they held a significant shareholding, and re-branded by Ford, GM and Chrysler for the U.S. market. The Ford Cortina, Ford Festiva, Geo Metro, and Dodge Colt are examples.
Technologies that developed during the post-war era, such as disc brakes, overhead cam engines and radial tires had become cheap enough to be used in economy cars at this time, (radials began to be adopted in the 1950s and 60s in Europe). This lead to iconic cars such as the 1974 Mk 1 Volkswagen Golf designed by Giorgetto Giugiaro, Fiat 128 and 1972 Honda Civic. The Civic's CVCC (Compound Vortex Controlled Combustion) Stratified charge engine engine debuted in 1975 and was offered alongside the standard Civic engine. The CVCC engine had a head design that promoted cleaner, more efficient combustion, eliminated a need for a catalytic converter to meet emissions standards - nearly every other U.S. market car for this year needed exhausts with catalytic converters. The Japanese who had previously competed on price, equipment and reliability with conservative designs, were starting to make advanced, globally competitive cars.
Some previously-exotic technology electronic fuel injection became affordable, which allowed the production of high-performance hot hatch sport compacts like the 1976 Volkswagen Golf GTI. This car combined economy of use and a practical hatchback body, with the performance and driving fun of a traditional sports car several times its price.
Also introduced in 1976, was the 1.5L VW Golf diesel - the first small diesel hatchback. It used new Bosch rotary mechanical diesel injection pump technology. (List of discontinued Volkswagen Group diesel engines)
In 1983 FIAT launched the next step forward in small car design, the Fiat Uno. It was designed by Giorgetto Giugiaro's ItalDesign. The tall, square body utilising a Kamm tail achieved a low drag coefficient of 0.34, and it won much praise for an airy interior space and fuel economy. It incorporated many packaging lessons learnt from Giugiaro's 1978 Lancia Megagamma concept car, (the first modern people carrier / MPV / mini-van) - but miniaturised. Its tall car / high seating packaging is imitated by every small car today. It showed that not just low sleek cars could be aerodynamic, but small boxy well packaged cars could be too. It was voted Car of the Year in 1984.
Also in 1983 Peugeot launched the Pininfarina styled Peugeot 205. While not as radical as the Uno in body design, it was also very aerodynamic. It was the first European supermini with a diesel engine - the excellent XUD that was the benchmark in diesel refinement for fifteen years. It provided the sprightly performance of a 1.4 L petrol with economy - - that was better than the base 1 L petrol version. It could also last for several hundred thousand miles with regular servicing. It was, along with the larger (also XUD powered) Citroen BX, the beginning of the start of the boom in diesel sales that are still increasing in Europe today. The 205 GTI was also a runaway success.
From the mid 1980s 4WD technology was available on the Subaru Justy, which utilized a three cylinder 1.0 L and 1.2 L engine. A 4WD version of the Fiat Panda was also launched. (The new 2004 Panda also has a four wheel drive version.) These cars were popular with veterinary surgeons.
Economy cars today
Today economy cars have specialised into market niches. The city car, the all-round economy car (that may not be small at all, just cheap), and the performance derivatives, that capitalise on light weight of the car that they are based on. Some models that started as economy cars have increased in size and moved up market over several generations, so that all that is left is the name. Smaller new models have been slotted into the market by their makers beneath them.
The much tougher design challenges for economy cars, (cost, lightness vs safety, lightness vs ride quality, lightness vs durability, maximising interior space), continues to be the driving force behind development. Technology improvements: Electronic engine management, Hybrid cars and smoother, more powerful diesel engines first seen in the VW Golf and Peugeot 205 have improved fuel economy and performance. Safety and comfort have become increasingly high priorities. Safety design is a particular challenge in a small light car. This is an area where Renault has been particularly successful. Sport compacts and Hot hatches have developed into a highly competitive genre, although outright economy has been significantly compromised, they are still the most economical cars for their performance - because of the lightness of the cars that they are based upon.
The growth of developing countries has also created a new market for extremely inexpensive new cars. Utilitarian but advanced 'peoples cars' have not been the favoured design solution. Instead the adaptation of standard or obsolete models has been the norm. This has been furthered by the fact that increased competition in developed markets means that cars are replaced at shorter and shorter intervals. The brilliant Chrysler CCV design failed to reach production because of this trend. The new Tata Nano launched in January 2008, in India by Tata Motors, may mark the beginning of the return of 'people's cars' because of its spectacularly low announced price - touted as the world's cheapest car at US$ 2,500.. It remains to be seen though, if it can be profitably produced at that price. TATA have also announced plans to export their Tata Indica which was formerly sold in Europe as the City Rover.
The narrow profit margins of economy cars can cause financial instability for their manufacturers. Historically, Volkswagen in the 1970s and Ford in the 1920s almost collapsed because of their one model economy car policies. Ford was saved by the Model A and Volkswagen was saved by the Golf. Ford started the Mercury and Lincoln brands to diversify its product range. VW moved away from the narrow profit margins of economy cars, by expanding its range so that now it spans from very small city cars like the Volkswagen Fox to Audis and Bentleys, and it also owns SEAT and Skoda.
China has become one of the fastest-growing car markets, followed by India, with a preference towards cheap, basic cars, but they are moving upmarket in their tastes as their economic rise continues. Some mainstream European auto makers have also specially developed models with these features, such as the Fiat Palio, Volkswagen Gol and Dacia Logan. Renault has teamed up with India's Mahindra and Mahindra to produce a low-cost car in the range of US$ 2,500 to 3,000. In other cases, older, simpler economy car models may be offered at very low prices in markets like South Africa and Brazil. The Volkswagen Citi Golf is an example.
The long standing specialist makers of economy cars from France, Italy and Japan have been joined by South Korean car makers whose best cars provide very good value prices with Japanese standard reliability and Italian design by ItalDesign and Pininfarina. Looming on the horizon of the global economy car market will be new exported designs from China and India.
List of economy cars
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