It probably hasn’t escaped your attention that the Volkswagen Group plans to be the world’s largest car maker by 2018. And if two of its revelations in the past 24 hours come off, it would be almost incomprehensible if it doesn’t get there.
First up is its new budget brand to rival Dacia, which VW R&D chief Ulrich Hackeneberg spoke so candidly about for the first time.
VW has a wealth of tried, trusted and fully developed mechanicals across many different car sizes and model types in its stable that it can quite conceivably roll-out for its new brand in little time and without vast set-up or development costs.
And on top of that, it has the production lines to build the models and a full stock of parts and suppliers to call on with its enormous buying power to keep costs to a minimum.
The Dacia model seems hard to fault, but you get the sense VW sees volume potential for its new brand far above Dacia. “Dacia is not in big markets,” said Hackenberg, “It’s in Europe and South America, but not China. There is much more space for a budget brand to grow.” And no doubt VW’s chances of the number one spot with it.
If VW is soon to have the budget end of the market covered, it plans to cover the core of the market with its much talked about MQB platform. Its imminent presence in Europe on models ranging from the VW Polo to Passat in size, with every Audi, Seat and Skoda falling in between those models also switching to MQB, is well documented, but VW’s plans for MQB and fully realising its buying power, production efficiency and economies of scale is truly a global plan.
At a briefing into the future of the Brazilian car market on Monday, it was confirmed that VW would be building models on MQB-based structures in South America in the near future.
The economies of scale will be such that VW will be able to build models in the region on much more contemporary underpinnings at the same cost as today’s more dated, less sophisticated structures.
So in real terms, that will mean your average Brazilian buyer will be able to get the most up-to-date technology, a higher quality interior and a lighter, more economical car for the same price as a rival product that’s unlikely to match any of those things in the developing marketplace for a few years yet.
VW is already the market leader in Brazil, and with such a compelling business case for the market for the next few years there while the market rapidly expands, it’s hard to see buyers turning away.
And if this sort of success is mirrored in other emerging markets, can anyone stop VW in its quest to be number one?