Volkswagen and PSA can abandon the production of mini-cars

Volkswagen and PSA can abandon the production of mini-cars

The segment of mini vehicles have always been stable, especially in Europe, accounting for 8% of the sales from the entire market. However, the situation is changing, as car manufacturers are becoming harder to profit from their sales because of more stringent environmental standards and higher demand for technology.

The German Volkswagen Group and the French PSA Group expressed uncertainty about his future in the segment of mini-cars. CEO of VW Group Herbert Diess complained of more stringent environmental regulations that will be introduced in 2020 – he fears that minicare will not be able to comply with the new standards, while maintaining competitive cost.

For example, now the European price tag for the compact VW Up! Starts from 11 thousand euros, but due to the introduction of new norms model can increase by 3,500 thousand euros. The company is not sure how many customers will be able to afford (and want) to buy an entry level model.

As for the PSA Group, their production of minicarb Peugeot 108 and Citroen C1 can cease after 2021 Toyota will buy out their joint plant in the Czech Republic. In this case, the French can simply exit the segment, so as to transfer production can be nowhere and simply unprofitable.

It is believed that more stringent environmental regulations and increasingly expensive modern technology in cars will eventually negate the life segment mini-cars. Maybe save it can the development of electrification, but we are not talking about the short term, since the technology of electric cars is still quite expensive.

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