Autoblog

Following the approach taken by rival Renault, PSA/Peugeot-Citroen is working on an entry-level car set to debut in emerging markets in 2011. The Renault Logan has done well in Russia and Romania, which has prodded this interest and action from PSA. The new five-passenger vehicle will be assembled in Turkey or Poland and sold in eastern and central Europe, Russia, Turkey, and North Africa wearing both Citroen and Peugeot badging. If successful, sales would also expand to include China and South America. Even if the vehicle sells well, PSA/Peugeot-Citroen CEO Christian Streiff maintains there are no plans to sell the new car in western Europe – regardless of Renault's strategy.

[Source: Automotive News, subs. req'd]

Russia has just passed Germany as Europe's largest market for new car sales -- for the first half of the year, at least. In fact, Russian consumers managed to snatch up 41% more cars for the first half of this year as compared to the previous year. Not only that, but the vehicles being sold in Russia are more profitable than before as well, with the record $33.8 billion in sales so far an increase of 64%. Top marques are General Motors and Hyundai, which replace last year's first and second place finishers, Ford and Toyota. Russian brands? Not so much.

Don't expect the sales figures to cool down any time soon, as the economy in Russia is still booming and it's the middle-class that is seeing the biggest benefit. Older cars will continue to be taken off the road as consumers purchase new replacements which will allow automakers to find an estimated 20-percent of the entire industry's growth in the Russian market over the next several years.

[Source: Inside Line]

Businessweek (BW) provides a detailed description of the conditions in the emerging automotive markets of China, India and Russia.

According to the business journal, Chinese demand for automobiles grew between 60% to 70% per year between 2001 through 2004, only to be slowed down when the government increased interest rates. BW predicts the average growth to be at least 10%-15% per year with Global Insight Inc. suggesting the Middle Kingdom will be the second largest marketplace after the U.S. by the year 2013.

[More after the jump]

[Source: Business Week]

Toyota Motor may be eating other automakers' lunch in North America and Europe, but it's having problems developing a successful strategy for emerging markets in Brazil, Russia, India and China.

Established automakers around the world are rushing to plant a flag in these markets of the future, but Toyota finds itself handicapped by the strategy that led it to success elsewhere - a focus on quality and safety. The problem is that Toyota has made market-leading quality a cornerstone of its corporate identity, a strategy that plays well in established markets with sophisticated buyers, but one that just doesn't resonate with cost-conscious customers in emerging markets.

As a result, Toyota's most successful models are priced out of reach for the majority of emerging market consumers, and the company admits it badly needs a new, cheap, no frills compact model to pump up sales volume in countries like India, where price is king.

A partnership with small-car specialist Daihatsu is an obvious solution, but Daihatsu wants to grow its own brand in overseas markets, independently of Toyota.

However Toyota solves this problem (and I wouldn't bet against them), the result should be the fuel for countless B-school case studies in the next five years.