Currently reading: Volkswagen's new budget brand hits cost problems
High internal manufacturing standards blamed for new budget brand's delay; company chief says "we know we face a challenge"
Jim Holder
News
2 mins read
3 March 2014

Volkswagen's chief of research and development, Dr Heinz-Jakob Neusser, has confirmed that the VW Group is still working on the launch of a budget brand to rival Dacia – but admitted it is yet to find a solution that will allow it to prepare for launch.

The mooted Volkswagen Group budget brand had previously been reported to have hit repeated problems as a result of the company’s own internal standards for manufacturing.

Speaking at the Geneva motor show, Neusser said, "We are still working on the issue of the brand, but we haven't made a decision on it yet. We know we are not prepared to launch cars that don't meet our maximum quality aspirations, and we know we face a challenge.

"But now is not the time to say more than this. We will work on a solution and then talk about it if we find it."

Insiders report that the company is struggling to hit budget targets for the proposed cars while still maintaining what senior management has deemed “necessary” quality and safety levels. As a result, there is currently no business case for making the vehicles.

However, the project is reported to be “still under consideration” as opposed to being put on hold or cancelled. Insiders say that VW’s technicians have been impressed by how rival brands – including partner Suzuki, with which it is at loggerheads – have managed to create high-quality budget cars without pushing costs up.

The low-cost brand is being investigated by VW because it would give the group a direct rival to Dacia and allow VW to further penetrate lucrative markets in China, India and across Asia and Latin America, as well as enhancing its offerings in Eastern Europe, the Baltic region and Africa.

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Darren 1 March 2014

Hmmmm...

"High internal manufacturing standards.." From the company that only recently axed the original VW bus. Which I love, have a '68 version. But let's not keep spinning this image of VW as a faultlessly engineered paragon of reliability. Look at South America, South Africa, China until recently. Where they can get away with flogging decades old, technology, they do. And do it very well. Just please don't continue this charade, Autocar!
concinnity 1 March 2014

Budget brand naming.

What will they call this new budget brand from Germay's largest car maker? It is a name that must have meaning and some history, and hark back to the great days of the past. While at the same time alluding to universal appeal. And of course it must be a name without pretension. A name absolutely impossible to imagine as a luxury brand but which is suggestive of modern social democracy, as exemplified by the New Germany of the late 20th and early 21st centuries. There can be only one name.
What is the German for 'People's Car' ?
Einarbb 28 February 2014

It might be a good idea to revive an old brand . . .

. . . but it Wag can't do cheap enough without compromising to some degree it's standard. It would then be better for Wag, to produce that budget brand under a different name. Trabant or Wartburg could work quite well, for a pure budget brand - produced as cheaply as possible without at least compromising safety. It could be produced say in Slovakia or Poland. Not inside Germany. Hence giving a little more distance to it's other products, not compromising the made in Germany quality image.