"We are always looking for new segments in global markets, we can now see a lower segment with potential," said Dr Ulrich Hackenberg, VW's head of product development, at the Sao Paulo Motor Show. "We can see a new segment coming. We currently produce cars in China that cost around 8,000 Euro, but there is space for cars costing around 6,000 Euro."
Hackenberg ruled out transforming one of the VW Group's existing brands into a budget brand: "It won't be SEAT or any of the other brands, this is something new."
Although the desire and technology are clearly there, the project is still in its infancy: "We are still at the phase of calculating and evaluating," Hackenberg revealed. "It makes sense to use existing technology that's already been invested in so it's easy to share costs with existing models."
When we asked Hackenberg if he was surprised by Dacia's success, he said: "I'm not surprised, but we're watching them carefully. They aren't in big markets like China and Europe yet, so there's still a lot of space for us."