Filed under:
Budget,
China,
Europe,
Volkswagen
Reports in October 2012 claimed
Volkswagen had begun investigating the
creation of its own budget brand. This came after having failed to purchase Malaysian car company
Proton or produce a meaningful partnership with
Suzuki, and after watching
Renault-
Nissan make
piles of euro on
Dacia and plot the return of
Datsun.
For VW, more important than the question of what to call it was how to build it profitably and in a way that didn't damage the VW brand. According to a report in
Autocar, a satisfactory answer still hasn't been found. The hurdle is how to hit "'necessary' quality and safety levels" at the price points needed to make the venture worthwhile. At the time of the 2012 report, German outlet
Der Spiegel said VW was trying to get prices down to 6,000 to 8,000 euro ($7,784 to $10,379 US), about two thousand to four thousand euro under the price of the VW
Up and in line with the cost of a 6,790-euro Dacia Sandero in Germany.
In March 2013,
VW announced, "We want to bring a true budget car to the market in China in the foreseeable future," the most concrete move in that direction after
years of planning to make a decision. Working with local Chinese maker FAW, it was predicted that the vehicle in question would appear around 2016, but as of November last year a final vote on it needed to wait until this year because "We are
still working on the cost side" and profit possibilities for a car that "has to be durable, it has to be precise, it has to be safe."
Even
Fiat, another automaker long considering a budget brand beneath its Fiat line-up, wasn't sure how to squeeze any extra money from lower-cost products but was sure that it couldn't be done by manufacturing in Europe. If VW hasn't yet made the math work with a joint venture in China, it will be interesting to see how it might build a European go-it-alone business case.
VW budget sub-brand stuck in limbo over VW standards, costs originally appeared on
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02-03-2014, 05:10 PM
