Hedging is normally a phrase used to describe offsetting risk in a financial deal. But it’s emerging at Frankfurt as one of the major techniques deployed to help the car industry cope with the switchover to electric models – whose customer demand is as yet unclear.
In the car industry's case, the ‘hedging’ refers to keeping two models on sale to cover the same market segment – one with internal combustion engines (ICE) and one with electrified powertrains.
But it also plans to keep another Macan on a conventional platform, powered by petrol and diesel engines, on sale for markets where demand for electrification is forecast to be low.
It will be aimed at the same people who might also be expected to be in the market for a Golf. However, in many markets, the ID 3 will be too expensive and not required by legislation, so VW is also locked in to replacing its iconic Golf.