Currently reading: Volkswagen working on budget model for Chinese market
Engineering work is under way on a cost-effective platform to use in a budget saloon and SUV for China

Volkswagen’s long-running budget car project has taken a new turn, Autocar can reveal.

The latest project is to engineer a new, inexpensive components set that will underpin both a saloon and an SUV, with the two models "sharing as many common parts as possible".

There are no more details because the engineering work is still under way, but if the project makes production the cars will only be sold in China. Previous work at VW on a budget car for China seems to have been put on ice. Said to be a contentious issue inside the company, the ealier budget project initially failed to meet rigorous cost targets.

It also fell foul of executives who felt that such a basic vehicle would not be worthy of the VW badge. Outside of the Chinese market, VW will not be competing on price, say sources, because the brand is centered on being the premium choice among mass-car makers.

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Daniel Joseph 2 April 2015

Why is China different to other markets?

If a "budget" model range would undermine the VW brand's "semi-premium" positioning in other markets, then wouldn't this also be the case in China? If so, why doesn't VAG use the Skoda brand instead for such models? It would seem sensible for VAG to settle on one logical global brand hierarchy and associated brand values, and stick to it. How about this: Skoda = budget, sensible, functional. Seat = youthful, active, alternative. VW = semi-premium, classless, conservative. Audi = premium, luxury, elegant. Just a thought...