VW budget brand “to get go-ahead”

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14 Jan, 2013 7:43am Graham Hope

New Volkswagen budget sub-brand is set to be approved later in 2013

Volkswagen’s budget brand looks set to get the go-ahead this year. CEO Martin Winterkorn said at a press conference prior to the Detroit Motor Show: “The decision whether we will produce a model for emerging markets will be made later this year.” But plans for the brand are well advanced already, according to R&D boss Dr Ulrich Hackenberg.

Dr Hackenberg told Auto Express: “We need time but we will do it.” The plan is to build a car that will sell for the equivalent of around 6,500 Euros in China.

To be able to sell at a low price, the car will have to be manufactured in China, too. “It needs to be fully localised.” said Hackenberg. “You need low productions costs and all the suppliers to be low cost too.”

The car would incorporate some parts used in models already on the market, as there would be no need for any additional investment to develop them.

It will not wear a VW badge but will instead carry a new name – not from VW’s past – that would have some significance to the Chinese market. “That’s the way we are thinking,” he confirmed. “You can’t enlarge the offer or a brand too far.”

Safety would be comparable with rivals – “if they have three stars [in crash tests] we will try to make one with four” – and GM’s Buick Excelle, which is a big hit in China, is seen as a success story VW can emulate.

Different markets such as India and China would get different cars, but it is the latter that VW is considering first. And that means the budget brand will not come here, even if the likes of Dacia is a huge success for Renault.

“For the first model we are looking at China, and VW does not export from China,” confirmed Dr Hackenberg.

The brand could be launched within two years if, as expected, it gets rubberstamped this year.