Firm will launch low-cost car in China; standalone brand in other markets also possible

The VW Group is still investigating whether to launch a budget car brand in the vein of Dacia to compete for sales in emerging markets such as India and northern Africa, but expects to gain insights into the idea through the joint development of such a car for the Chinese market with its partner FAW.

Speaking at the Geneva motor show, Jürgen Stackmann, VW's board member in charge of sales, marketing and aftersales, said: “We are looking at redefining the standards of what will make such a car feasible. It is absolutely important we get them right. Some things we can compromise on, some we can’t.

“Safety is a given, for instance: no compromises. But some areas, like door hinges, there are things we can do. The company has some internal standards that make our cars such high quality - but perhaps some of them are our own standards, rather than ones customers are demanding. If we can prove that is the case, then maybe we can meet our objectives for a budget brand.”

The joint venture car for the Chinese market with FAW is already being developed, and will be launched into a segment that is booming in China, as the middle classes in smaller cities seek to own cars. “The Chinese car makers are making some really impressive vehicles in this segment, for a good price,” said Stackmann. “They are getting something right, because the customers perceive the cars to offer tremendous value.

“It is part of the industry we must understand. If we can do that, then it is clear we must continue to investigate a separate brand for other markets with high interest.”

Prior to the emissions scandal, former VW Group boss Martin Winterkorn suggested that the standalone budget brand would launch in 2018 with a three-car line-up, including a family hatch, family saloon and a SUV.

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Comments
3

2 March 2016
I thought VAG, now VW Group, bought Skoda as their budget brand?

2 March 2016
Now they just have to come up with a name that could only suit a budget brand, and couldn't be used on any upmarket cars. What would the German translation for 'people's car' be?

2 March 2016
I suppose every little saving would add up, but it's hard to see exactly how you would de-engineer (Is that a word?) a door hinge to achieve a significant saving, except at the cost of durability and longevity. I would have thought that where you build it, i.e. labour costs, would be where the big savings are to be found.

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