China dominates in list of world’s cheapest cars

By Jacqueline Mitchell

updated 12:34 p.m. ET Aug. 8, 2008

In the market for a brand-new, no-frills ride for less than $4,000? No problem — at least, not if you live in China. The country is home to the cheapest car in the world, the very basic Jiangnan Alto, powered by a 0.8-liter, three-cylinder engine and selling for a mere $3,785.32 (25,800 yuan).

If China is a bit far from where you'd planned to purchase a car, not to worry. There is a plethora of cheap cars available around the world, especially in developing countries. The cars aren't particularly flashy but should serve the purpose of easy transportation from Point A to Point B. How do we know? We've seen many of these cars before, it turns out.

The Jiangnan Alto is roughly the same car that's the cheapest in other parts of the world, including India (Maruti 800) and Chile ( Suzuki Maruti). All these cars are, "essentially, a 1980s Suzuki Alto," says David DiGirolamo, head of JATO Consult at JATO Dynamics, a U.K.-based research and analysis company that provides a broad range of data on the global auto market.

"This car paid back its design and development costs many years ago, allowing it to now be sold at a lower cost than a more recently developed car," DiGirolamo explains. "It usually takes a few years for revenue from sales to repay the development costs of a new car."

Not all the cheapest cars in the world are Suzuki Altos, of course, but most of the world's cheapest rides are found in the developing or economically weaker countries in their respective regions. In Asia the cheapest cars are all found in China; in North America, they're in Mexico; in South America the cheapest cars are in Chile; between Australia and New Zealand, the cheapest cars are in the latter; and in Europe the cheapest cars are in Russia.

Behind the numbers

More from Forbes.com Click links below for slide shows America's cheapest cars Hardest to get cars Most value-packed cars Most affordable luxury cars Most expensive cars to insure

To develop our list of cheapest cars, we divided the world into the five aforementioned regions and used prices for new cars supplied by JATO, which tracks auto data in 43 different countries.

Just because a car is cheap doesn't mean it's bad, as there are many factors that can push down vehicle prices. In nearly 50 percent of the regions with cheap cars, the vehicles are produced in the same market in which they're sold, which reduces shipping costs and eliminates import duties.

This is the case in China, Russia and India, says JATO's DiGirolamo. Also, many of the vehicles on the list have smaller, three-cylinder engines, which are generally less expensive to produce because of fewer components and less raw materials.

There's also less of a used-car market competing for sales.

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