VW mulls launching low-cost subbrand in China, executive says
WOLFSBURG (Reuters) -- Volkswagen may build its first low-cost car in China, development chief Ulrich Hackenberg said, as the automaker considers a move into no-frills vehicles to compete with Renault's Dacia and Nissan's Datsun.
More than 3 million so-called budget cars are sold in China every year, making it the biggest market in that segment and VW would tap growing demand by teaming up with one of its two Chinese joint venture partners if the project is approved, Hackenberg told Reuters.
"That's an issue we're currently looking at," Hackenberg said in an interview at VW's Wolfsburg headquarters
VW is looking at a price range of between 5,000 and 10,000 euros ($13,300) for the cars, which may include a minivan, station wagon and a small sedan, company sources said on Oct. 12.
The cars would be aimed at fast-growing BRIC nations (Brazil, Russia, India, China), but may also be sold in Europe, according to German media reports.
VW CEO Martin Winterkorn said at the Detroit auto show on Jan. 13 that a decision on a budget car for emerging markets would be taken this year.
The company is working on hitting cost targets for the car and has not decided yet whether it would keep the VW badge or have a different brand. "If one enters this segment for the first time, it's necessary to keep investments very low," Hackenberg said.
VW would use pre-existing mechanics from models that have gone out of production or are nearing the end of production, rather than develop new costly underpinnings for the brand from scratch, he said.
Hackenberg said it was unclear whether the automaker would bring the budget car to Europe because it could cannibalize its cheaper brands Seat and Skoda. VW was not yet sure if there would be demand for such a vehicle in Europe, he said.