A senior Volkswagen Group official has exclusively confirmed for the first time that the firm is considering launching a low-cost brand to rival Renault's fast-growing budget arm, admitting it is "following the Dacia story very intensely".
Speaking to Autocar ahead of this week's Sao Paulo motor show, R&D chief Ulrich Hackenberg said the VW Group was "always looking at new segments building up in global markets", and it had identified huge potential for launching cars "below prices we currently sell at".
"There is now a big segment growing below us," he said. "In China for example, we're selling cars for less than ever for 8000 euros but there are brands selling for 6000 euros. It makes sense to rival these brands, we're analysing it and pre-thinking it."
Hackenberg said the Group was well placed to launch budget models as it would be able to use pre-existing mechanicals from models that have just gone out of production or are nearing the end, rather than develop new underpinnings for the brand from scratch.
"We have technology that has been invested in and improved over time, and it is easy to share costs with parts that are already available," he said. "So you don't need to make new investments in the technology."
Hackenberg stopped short of confirming what models would be launched in the new sub-brand, which would become VW Group's 13th nameplate if it chose to launch the models under a new badge, but it is understood a saloon, estate and MPV are all being investigated.
On Dacia's success, Hackenberg said he was "not surprised" by how well it was doing, but hinted that VW's response could yield even greater success. "Dacia is not in big markets like China," he said, "so there is a lot of space to grow more."