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Source: www.asiaecon.org |

THE EVOLUTION OF CAR MARKETS IN ASIA


The global economic recessions has exposed many markets where consumers are spending too much money. As jobs are cutting back and companies are falling, people are finding it harder to pay for the luxuries that they have become accustomed to. Just as people are actively cutting down on spending, national governments are also looking for ways to cut down spending and petroleum is at the top of their list.


The global economic recessions has exposed many markets where consumers are spending too much money. As jobs are cutting back and companies are falling, people are finding it harder to pay for the luxuries that they have become accustomed to. Just as people are actively cutting down on spending, national governments are also looking for ways to cut down spending and petroleum is at the top of their list.

Asia is home to the largest consumers of oil in the world;China, India, and Japan alone account for the one-fifth of the world’s oil consumption, while those same three countries only produce one-sixteenth of the world’s oil supply. To reconcile the discrepancy, these countries have to import millions of barrels per day

Today, Kia introduced its Forte LPI hybrid, which will be Kia’s first hybrid model to be mass produced by the company. They also unveiled their Eco-Dynamics line, which will include additional eco-friendly models that will be sold in international markets.

Another model that is expected to take over India is the Tata Nano, with a listing price at under $2,000. Although the new car is expecting to sell over 100,000 cars this year, the company is next expected to take in huge revenues. According to the Wall Street Journal, the car is instead targeting  younger consumers who they hope will buy more expensive models in the future. Either way, the success of the Nano will represent how much the global economic conditions have created a larger demand for more cost-efficient vehicles

Even as major car companies are slashing their budgets, many of them have refrained from cutting back any funding toward the development of fuel-efficient cars. Hyundai Motor Co., Toyota Motor Corp., and Honda Motor Co. have all kept research spending at about 5 percent of sales, even though Hyundai competed a $2.2 billion cost-reduction program last year. This represents a huge investment by car manufactures in Asia in the developing of this growing industry.

The development of hybrid cars is creating a market for battery producers, which is giving battery producers incentives to spend more on research in development in advanced battery technology.

The growth of the hybrid electric vehicles (HEV’s) market only represents a step in the evolution of car. As battery technology is becoming more advanced, cars will soon be able to lose its dependency on petroleum all together. This will allow for the further expansion of Plug-in Electric vehicles (PHEV’s). By 2015, 1.7 million hybrids are expected to be built and 100,000 of those will be plug-in vehicles, which will be solely powered by electricity.

Despite the high costs of developing cars on alternative energy resources, many car companies are already skipping steps in the evolution chain to develop hydrogen-fuel cell cars. It is easy to say that they are skipping steps because these companies are looking to developing cars based on technology that is not readily available for mass production. They are expecting hybrid industry to grow, which will allow the further development of plug-in hybrid vehicles, which will eventually lead to cars that will cut out reliance on fuel as a whole. The only reason why car makers have not been able to produce hydrogen fuel cell cars is because the technology is relatively expensive and is still unreliable. With the progress that battery technology has made over the past twenty years, it is safe to say that by 2013, these variables will no longer be a factor, leading to the growth of electric vehicles. 

Source: AsiaEcon.org
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Source: www.asiaecon.org |


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