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Thursday, July 15, 1999 Published at 13:50 GMT 14:50 UK


Business: The Economy

Sports cars driven off the road

Car-like trucks and "mini" cars are set to dominate the roads

Sports cars and luxury models are be overtaken by "mini" vehicles and off-roaders in the race for a larger chunk of the driver market.

In the next five years, worldwide production of small cars such as the Mini and Fiats, with only two doors, will outstrip all other types, according to new research.


[ image: 4x4 vehicles, such as the Ssangyong-Musso, will dominate, say forecasters]
4x4 vehicles, such as the Ssangyong-Musso, will dominate, say forecasters
Output of so-called sports-utility vehicles, with off-road capabilities, such as the Land Rover Discovery, will be close behind the minis.

Luxury cars such as the Mercedes-Benz S-class and Jaguar saloons will fall behind.

But the biggest group to lose out will be sports cars, including the Rover MGF, Ferraris and the Jaguar XJS, with production being cut by nearly a quarter.

The forecasts for global car manufacturing have been produced by the Economist Intelligence Unit.

It says that overall, car production will rise from 46.5m to 52.3m - an increase of 12.5%.

Mini car boom

Experts from the EIU found that in the years to 2004, the markets for cars at each end of the size scale will expand, as vehicles become more sophisticated.


[ image: The Rover MGF is a typical sports car, set to see a drop in production]
The Rover MGF is a typical sports car, set to see a drop in production
This means a 38.5% rise in growth of the "mini-car" market. These miniature cars, typically the Rover Mini and Fiat Seicento, with engines of less thatn 1000cc, are rapidly rising in popularity in Japan and Asia, particularly India, the report says.

European manufacturers are bringing out environmentally-friendly small cars, such as a shortened Peugeot 106.

But in Asia, price, rather than environmental concern, is driving demand.

Four-wheel-drive bonanza

Meanwhile, say the economists, nearly 25% more four-wheel-drive vehicles will be produced.

In North America, where demand for car-like trucks is very strong, makers are introducing luxury versions, with the likes of Mercedes-Benz acceding to demand.

In Europe, even Porsche is getting in on the act with a joint-venture vehicle with Volkswagen due in 2002.

The European 4x4 market is dominated by Land Rover, although mainstream manufacturers are all planning their own versions.

More worldwide off-road-style vehicles will be produced in Asia, excluding Japan, than Europe, says the forecast. Asian manufacturers like Daihatsu and Isuzi could benefit from this trend.

Sports cars lose their verve

Among the big losers from the change in trends will be luxury cars, normally with engines over 3500cc, such as the Mercedes-Benz S-class and Jaguar saloons. Rising demand in North America, in particular, will hit the luxury market.


[ image: Output of luxury cars, such as Cadillacs, will suffer]
Output of luxury cars, such as Cadillacs, will suffer
But those hit most by changing tastes will be sports cars. The largest producers of these are in western Europe and Japan, the largest being German firms DaimlerChrysler and BMW.

The researchers also predicted that output of small cars - those of between 1000cc and 1500cc, such as the Renault Clio and Nissan Micra - will rise by as much as 15.7%.

These are especially popular in Brazil, where the tax system favours those with smaller engines.

The lower-medium sector - such as the VW Golf and Toyota Corolla - will grow by 10.2%, while the upper-medium sector, whose typical examples include the Ford Mondeo, is set to grow by only 2.9%.

That could be bad news for UK producers, who typically concentrate on the fleet market which contains cars of that size.



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