Currently reading: Sao Paulo motor show 2012: VW confirms 'Dacia' plans
A budget brand is being considered by VW bosses as it was revealed it is following Dacia's growth intensely

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."

Mark Tisshaw

Title: Editor

Mark is a journalist with more than a decade of top-level experience in the automotive industry. He first joined Autocar in 2009, having previously worked in local newspapers. He has held several roles at Autocar, including news editor, deputy editor, digital editor and his current position of editor, one he has held since 2017.

From this position he oversees all of Autocar’s content across the print magazine, website, social media, video, and podcast channels, as well as our recent launch, Autocar Business. Mark regularly interviews the very top global executives in the automotive industry, telling their stories and holding them to account, meeting them at shows and events around the world.

Mark is a Car of the Year juror, a prestigious annual award that Autocar is one of the main sponsors of. He has made media appearances on the likes of the BBC, and contributed to titles including What Car?Move Electric and Pistonheads, and has written a column for The Sun.

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sirwiggum 22 October 2012

VW itself was originally a

VW itself was originally a budget brand with their quirky old air cooled rear engined contraptions.

Seat was originally a budget brand building knockoff Fiats in Spain before they became some sub-Alfa MPV building mess.

Skoda was originally a budget brand, building rebodied Favorits and Golfs.

The Exeo and the mk1 Superb showed that they can sell a previous-generation vehicle at a no-nonsense price and people will buy it. Cuts down on development costs as it has already had a lifespan on the "premium" end. Build and sell cheap.

What badge to use? NSU? DKW? Horch? Wanderer?

asciimo 5 November 2012

Budget cars are nothing new

Budget cars are nothing new for VW, as most of their lineup in Brazil are actually lower in perceived quality than even Skoda. Fox, Gol, and Lavida are simply parallel lineup in developing nations for Polo, Golf and Jetta. Like Renault, it just needs to be consistent and stop using their namesake upscale brands for budget cars in developing markets so as not to risk damaging upward pricing potential on their European lineup.

sirwiggum wrote:

What badge to use? NSU? DKW? Horch? Wanderer?

I'm actually hoping they will actually bring back DKW or NSU just for this purpose. The fact that it stands for something in German probably helps given it's used for marketing automobiles.

TegTypeR 22 October 2012

13th Eh?

Clearly not supersticious then.

I am very surprised that VW haven't done this before now with a sub brand.  It worked for them in the form of the Seat Exeo / Audi A4 with higher end vehicles, so there is no reasons why a budget recreation of cars like the VW Fox wouldn't work.

Strip out the needless detritus that gets fitted to modern cars and any of their old models could work well as a rewarmed budget model.

AutoChomp 22 October 2012

Yes but no. The problem is it

Yes but no. The problem is it doesnt really cost that much more in terms of materials to build a A4 size car than it does a A1 size car. However you can charge 2/3x more. Hence you have room for lower brands.

If they made a cheap UP, there would be virtually no profit unless like Audi with the A1 they push the whole perosnalisation thing, and everyone ends up with 19inch wheels and a different coloured roof and a £20000 car when they just wanted a £13000 New Audi.

Like people said before, very few will buy a Dacia without a radio or steel wheels. The dealers will have to ram the upsell for them to be profitable. At present they are a new company with a new idea (a genuinely cheap, good looking, precieved well made car) so they have an advantage and deserve success for something different.


In China presently VW rehash older cars (even MK2 Jettas and Passats) with facelift front ends. As do Citreon. I remember seeing a 206 badged as a Citreon C2. Was a 206 rear with a Citreon front end. With some Chinese cars getting better all the time, VW etc cannot do this for long. They need the sub brand, as they are European and deemed mid-up market in China etc. They would not want to devalue that.

kcrally 22 October 2012

If VW want a budget brand,

If VW want a budget brand, maybe they could buy FIAT.