Business Channel 2007-05-01&03

Well, it's no secret the American auto¹ sector² is fueling the heat-increased competition, Americans' souring on American cars, the list goes on and on. But there’s definitely a bright spot in Detroit’s future, in developing markets. Call it the new car Ka-Ching. Phil Lebeau is on the Money.

They may be small and cheap, but these cars are becoming big business for automakers, especially overseas. In Europe, Renault has sold more than 400,000 Logans, at 75 hundred dollars a pop, which has car watchers wondering if the Logan is the way of the future.

The Logan at this point is a cheap car for Europe that is produced in the eastern block. It undercuts a lot of other European cars by about 30%, and it’s a very good effort, because it’s produced by a serious car company.

Renault CEO Carlos Ghosn would like to ultimately sell an entry-level car for 2500 dollars, which is the same price India’s Tata motors has set for its people’s car, coming out in late 2008. With middle classes booming in India and China, Renault and Tata are trying to capture first time car buyers. So why aren't the Big Three doing the same thing? After all, GM is testing out mini cars, it may eventually sell. The problem is, little cars have little profits.

It isn’t very profitable, so if you take a look at the profit that GM would make selling a Cadillac Escalade here, they would have to sell about anywhere from sixteen to seventeen of those small cars to equal the profit that they would get on one Escalade.

While these small cheap cars may be the future in developing countries, don’t expect to see them on the streets here in the states any time soon. That’s because with the labor³ costs as high as they are here in the US, it doesn’t pay for automakers to make a car that sells for under ten grand. And memories of the Yugo could keep people from wanting to take a chance on a really low-price foreign-made car.

So, for now, these tiny cars that are a big deal overseas will likely stay overseas.

On the Money, Phil Lebeau, CNBC, Chicago.

NOTES:

1. Big Three

A reference to the three largest automobile⁴ manufacturers in North America:

1. General Motors
2. DaimlerChrysler
3. Ford⁵ Motor Co.

2. Cadillac Escalade

The Cadillac Escalade is a full-size luxury sport utility vehicle sold by the General Motors luxury brand, Cadillac.

3. undercut

To sell at a lower price than or to work for lower wages or fees than (a competitor).

4 .Renault

Renault S.A. is a French vehicle manufacturer producing cars, vans, buses, tractors, and trucks. The company is well known for numerous revolutionary designs, security technologies and motor racing⁶.

1 auto   

n.(=automobile)(口语)汽车

参考例句：

• Don't park your auto here.别把你的汽车停在这儿。
• The auto industry has brought many people to Detroit.汽车工业把许多人吸引到了底特律。

2 sector   

n.部门，部分；防御地段，防区；扇形

参考例句：

• The export sector will aid the economic recovery. 出口产业将促进经济复苏。
• The enemy have attacked the British sector.敌人已进攻英国防区。

3 labor   

n.劳动，努力，工作，劳工；分娩；vi.劳动，努力，苦干；vt.详细分析；麻烦

参考例句：

• We are never late in satisfying him for his labor.我们从不延误付给他劳动报酬。
• He was completely spent after two weeks of hard labor.艰苦劳动两周后，他已经疲惫不堪了。

4 automobile   

n.汽车，机动车

参考例句：

• He is repairing the brake lever of an automobile.他正在修理汽车的刹车杆。
• The automobile slowed down to go around the curves in the road.汽车在路上转弯时放慢了速度。

5 Ford   

n.浅滩，水浅可涉处；v.涉水，涉过

参考例句：

• They were guarding the bridge,so we forded the river.他们驻守在那座桥上，所以我们只能涉水过河。
• If you decide to ford a stream,be extremely careful.如果已决定要涉过小溪，必须极度小心。

6 racing   

n.竞赛，赛马；adj.竞赛用的，赛马用的

参考例句：

• I was watching the racing on television last night.昨晚我在电视上看赛马。
• The two racing drivers fenced for a chance to gain the lead.两个赛车手伺机竞相领先。