The Kia Picanto, Renault Twingo, and Peugeot 108: these hugely popular A-segment cars are likely to become significantly more expensive. You can currently still buy these cars new for around €12,000. In 5 to 10 years, these city cars might cost a quarter more.
CO2Emissions down, price up?
This has everything to do with the rise of the electric car and the European Union's rules to reduce CO2-to reduce emissions. Because even the most economical, environmentally friendly cars cannot meet those emission requirements, car manufacturers are broadly resorting to the development of electric and hybrid vehicles. And these are inherently more expensive to produce.
What's more, certain safety features, which will be mandatory from 2021, are already increasing production costs.
Small and compact cars hit hardest
A hybrid powertrain in a new car costs around €3,000. This only adds a few percentage points to the selling price of a more expensive car. In the case of a city car, this amounts to a price increase of approximately 25 percent. These are therefore expected to fall out of favour with the price-conscious consumer.
Car manufacturers are anticipating this by ceasing production of these models. The Peugeot 108 and Citroën C1 have already been written off. Also other cars from the A-segment – and even the B-segment – face an uncertain future.
Temporary price increase?
As the production costs of electric cars gradually decrease, you should in principle see that reflected in the selling price. It is therefore not inconceivable that these types of small cars will make a comeback. However, that is not expected to happen for about ten years. In the meantime, car drivers with a tighter budget will have to rely on the supply of used city cars.
However, given market forces and declining supply against rising demand, the price tag attached to a compact pre-owned car will also increase. The small cars that remain – new or used – will therefore become considerably more expensive regardless.
Are you currently driving a city car? What does this potential (price) development mean for you? Let us know in a comment. A Car hire in the Urmond region can at Adrem Car Rental.
