Volkswagen budget brand likely to get go-ahead

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19 Apr, 2014 10:00am Graham Hope

New Volkswagen budget brand to produce a low-cost car for Chinese market.

A decision on Volkswagen’s budget brand for China will be made soon – and it looks likely to get the go-ahead. 

The German company has been debating the project internally for a couple of years. The move would involve making a locally produced, low-cost car for China with a local partner, and introducing a new name for the brand. 

At a press conference before the Beijing Motor Show, Dr Jochem Heizmann, member of the VW Executive Board for China said: “We have been working on development of a budget car, and we are making very good progress, but there is still some homework to do.

“The project has to be economically efficient – but we are well underway and on the right track.”

VW budget brand: a long time in the planning

Back in the winter of 2013 VW brand development boss Dr Heinz-Jakob Neusser told Auto Express that Volkswagen was still assessing the business case for a budget brand targeting China and was not quite ready make an announcement.

“We are conceptually developing the budget car, but we haven’t decided up to now go into production development,” he stressed.

• VW budget brand “to get go-ahead”

“We are still working on the cost side, and that is the biggest issue. We will only make this car when it is profitable.”

The car, intended for China initially, will not be badged as a Volkswagen. But Neusser added: “It has a special brand in the Group, but it has to fulfil our criteria. It has to be durable, it has to be precise, it has to be safe. We will come to a decision next year.”

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The car will be manufactured locally in China, and sell for the equivalent of around 6,500 Euros. Volkswagen sold over 3 million cars in China for the first time in 2013.