New markets add Far East promise to auto semi sales

SEVENOAKS, UK: The manufacture of motor vehicles is on the increase, particularly in the Far East where in 2012 it will total 36 percent of global production compared to 23.9 percent today.

Toyota plans to radically rethink the entire production process and focus on low-cost materials and technology in an effort to create an ultra low-cost car for Brazil, China, India, Russia and other emerging markets.

Renault-Nissan has used the traditional design and manufacturing approach towards these markets and has developed a low-cost car off an existing platform, derived from the Clio model.  Nissan plans to produce a similar type of car in Turkey soon.

Fiat is using the Punto platform to extend its range of emerging market cars and is working on new designs at its Brazilian operations. From an emerging nation itself, Tata Motors has committed to produce a cheap, no-nonsense, small car for the local Indian market where millions often ferry families of four, plus baggage, on motorbikes and scooters.

At US$2,500 it expects eventual annual demand of 1 million cars, and other companies under licence may also assemble it.  Tata Motors may also export the car, which would probably sell well in Africa and South and Central America.

Future Horizons believes these systems for less industrialised countries are not necessary less complex.  For example, new vehicles in India will still have to meet global vehicle emissions monitoring regulations and to do this in area where fuel is of a mixed standard or even not necessary gasoline makes it difficult. 

Multi-fuel vehicles involve the engines being able to burn different fuels like petrol, ethanol and/or compressed natural gas.

One way of reducing cost is to ‘de-content’ the vehicle and offer all additional features as an option, so ABS and some airbags may go out of the window. Systems and components for low-cost vehicles have to be low cost in themselves, but just as reliable. This will put pressure on semiconductor content of vehicles, but with the increased volumes of vehicles these new markets will make a positive contribution to semiconductor revenue.