VW plots budget brand

VW Space up
15 Oct, 2012 1:22pm Tom Phillips

Volkswagen plans to take on Dacia with its own budget brand, expected to arrive in 2015

VW is planning to launch a budget brand, with aims to sell cars costing under 10,000 Euro, or just less than the current entry-level £7,995 VW up! at today’s exchange rates.

The news was reported by German paper Der Spiegel, which quotes senior VW spokesman Eric Felber as saying: “The idea of a low-cost brand has been on the agenda at Volkswagen for some time.”

However, when asked about a time scale for the introduction of a new budget brand, he qualified his statement by adding: “No decision has yet been made.”

The new brand is expected to arrive in 2015, and would be aimed at lucrative emerging markets like Brazil, Russia, India, China and South Africa.

The Latin American market is seen as particularly important, and VW is tipped to unveil an MPV version of the up! (as shown by the space up! concept pictured above) at next week’s Sao Paulo Motor Show.

Felber is not the first VW representative to comment on the firm’s budget brand plans. Earlier this month, head of VW’s Works Council, Bernd Osterloh, told newspaper Handelsblatt: "We need a cheap model below the VW up! for emerging markets."

However, the new budget brand’s cars wouldn’t necessarily be as small as the up!, with cars set to be built on slightly older platforms, like the new SEAT Toledo and Skoda Rapid, and made in factories in China and Russia.

While the budget VWs would be primarily focused on emerging car markets, where Renault has enjoyed huge success with Dacia, they may also be imported to Western Europe. The new brand would slot into the line-up beneath the VW Group’s current value brand, Skoda.

VW was expected to use its tie-up with Suzuki, which has a particularly strong position in the Indian market, to advance its budget car plans. However, that deal has since gone sour, leaving VW to go it alone.

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I have always thought of VW as a budget brand. If only they thought the same!

Which Up! concept was the one pictured above?

Love the Space-Up.

Zoom the size, add sliding doors and you have a neato Campervan 21st century style - and maybe that's what we'll see at Sao Paulo.
Talking of which, what's happened to last year's VW Bulli?

Puffed Up! (?)

I thought skoda was their 'budget brand'?

Mr Hitchcock! looking through your previous posts you evidently have a personal vendetta against vw as a brand! stop this childish behavior, stop hating and start rating as they say. I think what is funny here, is that you believe in the facade companies put forward, yes they may brand themselves as affordable etc but they did build the worlds fastest car?! you're obviously not as intelligent as you like to make out. just an opinion ;)

They could call their budget brand Seat and build the cars in struggling emerging economies like Spain.

I remember another car company that had hundreds of brands. It was called BL. All the brands ended up competing against each other, the public got confused and BMW bought the left-overs.

In reality VW already has 2 brands that could be re-aligned as a budget brand. Skoda was the original budget brand but it has done rather better than VW expected and now sits in the home that VW has long since departed; that of reasonable cost, good quality, basic cars.

Then they have Seat which is a puzzle. It was announced that it would be VW's Alfa but it resopnded with a range of cars all identically styled to look like MPV's - hardly sporty. Now it is reduced to building warmed over old Audi's and identikit Skodas.

The VW brand is an odd one because it has been pushed upmarket and now broadly competes with Audi - there's little to call between them.

They appear to have got themselves in a bit of a mess.

Glad someone else has noticed! Bet he drives a DS3 or a 500, or something equally as poncey, if that is at all possible....

I thought that their low budget car was the Up!
What changed again?
How low can you go???
Are we going back to the 80's mini tin box cars?
I guess they must know something more than what we know. Must be that the financial crisis is not just for Greece/Spain/Portugal/Italy but comiing for all world and all Europe ofcourse.

Bit puzzled as to this. The essence of my point of view is that no one should believe the facade companies put up, whoever they may be! Personal insults rather devalue the rest of your posting.

Haha! Totally agree with Chan. Paul clearly has a problem against VW and doesn't understand the fact that VW is one of the strongest manufactures in the world. There is no avoiding it!

I agree. I do have a problem with VW inasmuch as it gives too little and asks too much. If dull and dependable is what you are after go to Toyota and save the money.

Weren't VW threatening to axe Seat if their performance (as a company!) didn't improve? At least it sounds like Europe might escape yet another cheap and cheerless small car.

The up! is a model, not a brand.VW want a budget BRAND to compete head on with Dacia etc.

Vw's Budget Brand Yes We Know Who They Are Allready It's Seat & Skoda. ANOTHER Budget Brand How Greedy Can U Get VAG GREEDY !

You're not alone. I've always thought VW was a inexpensive auto maker that couldn't get their act together.
Making a cheap car and not importing to USA is huge mistake. America is begging for inexpensive automobiles that don't look like boxes.
VW, WAKE UP! You built your company on basic transportation, why are you trying so hard to be the next Toyota? Build America a cheap convertible like the old Rabbit Convertible, put a small engine in it, sell it as a simple city car.
~~~ That's what America needs!

I'm not posting to make any personal insults Paul, you just seem like you have the opposing argument to anything vw. vw has always marketed themselves as the premium budget brand. and yes I did just put those words together; a premium quality car for the average person. you make a fair point in some respects as to the cost of vws however, I must say from personal experience there is a vast difference in the build quality, the levels of finish, and in general the quality feel of the interior. I've had Toyotas, Nissans, Hondas etc but none seem to have the same build, they seem cheap inside and for that reason I think vw may be well in their right to ask for more money! people are buying more premium cars these days, and it must be the plans of any company to accommodate what the customer wants! now to your point regarding style, yes vw may not be the most adventurous but you can't call their cars ugly! just because others brands have taken the knife probably in the most literal way to their car bodies doesn't mean all should follow like mindless sheep. Plus, I think car design at its current is absolutely atrocious! nothing I would be too much in a hurry to follow if I was a car designer! all in all I think it stands that the Germans, be it vw, Audi, Mercedes, BMW, are still the best when it comes to buying premium daily drives. its not simply a matter of comparing brochures for alike features, but feeling the quality of a well made product.

I absolutely did not like VAG cars -- then my lad brought home a VW Phaeton -- what a car.

Since then, looking at other VAG cars, I've grudgingly given VW a bit more respect.

Paul, VW have never
been a budget brand, years ago I had several Golf Gti's they were
well built and not cheap, and my last VW car being a Bora sport about
13 years ago that cost £17.500 at the time, a lot more than the

Neither is Skoda a
reasonable quality costing basic car, all manufacturers have a basic
model and the cost goes up as it gets less basic with the added bells
and whistles, having driven company Skoda's I can tell you they are
just as good as VW but they are still expensive cars even though
priced a little under VW.

None of these brands
are cheap if you are paying for them yourself as I did, and now I
would say that both VW and Audi are far to expensive.

After R&D plus
tooling costs have been recovered cars are cheap to build, its only
profit margins which makes them expensive, and VW do not need another
dedicated budget brand they are well able to produce cars at sub
£8000 prices

Totally agreed ^^^

Just seen this posting. By complete coincidence I was talking to a colleague today who happened to mention her family's experience with VW, which I was not previously aware of.. Quite a tale of woe it is, starting with identical failures in electric window mechanisms in three different cars and carrying on from there. The tin lid was the brand new Golf which suffered a spectacular engine failure. Not exactly "quality" or "well made" I think.

They all then switched en famille to Skoda. Yes I know Skodas are part of VW but they do seem to be screwed together decently and there have been no more horror stories.
The only point I really want to make is vehicle quality and reliability is a bit of a lottery and it is intensely personal and subjective. I am unconvinced as to statistics from car surveys as these can be influenced both by "fanboys" and "knocking copy".

Oh what a tangled web we weave!

VW is in danger of losing its core image. I originally thought VW was a car that was meant to be affordable to buy and a budget "people's car" but Skoda has taken that crown beating VW in reliability, customer satisfaction and value for money. The only reason why skoda has not come out with a VW Golf sized car is becuase VW know skoda can do better and might out sell their Golf which is their money maker and biggest seller. As Skoda seems like VW's affordable budget brand, Audi is more premium then i cannot see where VW fit. Skoda cars are so good that it seems they can take on the likes of Ford, Fiat, Mini, Citroen, Renault and win hands down but then there is VW which seems to be an odd fit but they were meant to be their direct competitors. I think its becomes a bad situation when large company ends up buying too many car brands and soon doesn't know how to manage the lot. Ford/GM did the same and made a hash of it almost ruining and have ruined the future of the brands they owned. If VW end up buying Alfa Romeo which i hope they don't then Alfa is line to compete with Audi as a premuim brand. also if Alfa have VW components and engines then what are you buying exactly, as you might as well save yourself a lot of cash and get a Skoda, same chassis, engine, buttons and knobs. this is why big managers don't understand how important brand image is but much prefer cutting corners in pursuit of massive profits, i think its a real shame.

It looks like Ikea furniture

FfVW Groups brands are all positioned too close in my opinion, there is very little to differentiate one from another even though the models produced are getting more divergent the actual brands are all fighting over the same market segment and appear to be using the same stylist, how about moving skoda back to a position of reduced cost and complexity to rival Dacia and the influx of Chinese brands. Or even Seat, as it is the brand most struggling right how what is there to lose?