European Microcars Market


London The microcars segment is poised to become one of the largest revenue generators for over 30 market participants, including seven out of the top 10 global vehicle manufacturers (VMs). Challenged by tighter emission norms and safety requirements, the entire microcars market has evolved from being a highly protected and niche segment to an extremely focused one that even qualifies for vehicle crash tests.

New analysis from Frost & Sullivan, Strategic Analysis of the European Microcars Market, finds that the European microcars market is expected to witness the introduction of over 60 base models, including quadricycles, by 2013. Moreover, over 19 models are projected for launch by top seven out of 10 OEMs in the entirely new emerging class of sub-A segment vehicles over the next three years. The sub-A vehicles segment is anticipated to grow faster than quadricycles due to their characteristics and striking resemblance to A-segment vehicles.

In Europe, the focus on alternate fuel driven vehicles, congestion in city centres and increasing cost of vehicle ownership is expected to boost microcars sales over seven fold. Global mainstream OEMs have provided market momentum – over 30 models were introduced in the recently concluded 2010 Paris Motor Show and the 2011 Geneva Motor Show.

Over 75 per cent of the microcars announced are expected to be battery electric vehicles (EVs), with the major related challenges being range anxiety and limited speeds. Since their introduction, safety has been a cause of concern with the L6 and L7 quadricycles (L-category) and industry experts expect traces of this anxiety to persist in the microcars segment for a brief period. Increasing legislative controls are also expected to pull down sales in the long term.

This is likely due to the rising vehicle costs associated with the addition of new components recommended by legislation. Unlike sub-A vehicles, conventional engine powered quadricycles do not qualify for subsidies/rebates, resulting in quadricycle manufacturers facing the prospect of attenuating profit margins. The introduction, therefore, of electric quadricycles is a promising sign as they have started to qualify for regional grants and benefits including access to high-occupancy vehicle lanes and parking charge exemptions.