VW says may enter low-cost market with China-built car


Published — Saturday 26 January 2013

Last update 26 January 2013 1:58 am

| نسخة PDF Print News | A A

WOLFSBURG, Germany: Volkswagen may build its first low-cost car in China, a company executive said, as the German group ponders 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, VW brand development chief Ulrich Hackenberg said.
“That’s an issue we’re currently looking at,” Hackenberg said in an interview at VW’s Wolfsburg headquarters.
Europe’s biggest car maker is looking at a price range of between 5,000 and 10,000 euros ($ 13,300) for the cars, which may include a van, estate and a small sedan, company sources said on Oct. 12.
This may undercut VW’s 9,850-euro Up! city car, the brand’s smallest and cheapest model that is only sold in Europe and Japan. The two-door vehicle came to market in December 2011 and will be launched as VW’s first electric-powered car at the Frankfurt auto show in September.
VW lacks a strong presence in markets such as India and Southeast Asia, with their growing small-car segments. A 2009 partnership with Suzuki Motor Corp, designed to benefit from the Japanese manufacturer’s leading position in India, fell apart in 2011 in a public squabble.
VW Chief Executive 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 German multi-brand group is working on hitting cost targets for the budget 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 added.
Hackenberg said it was unclear whether the group would bring a new budget car to Europe’s embattled market because it could cannibalize its cheaper brands Seat and Skoda, and the firm was not yet sure if there would be demand for such a vehicle.

What's happening around Saudi Arabia

JEDDAH: A total of 172,000 pilgrims have arrived via 861 flights from around the world at King Abdulaziz International Airport so far, said Turki Al-Theeb, the airport’s director of media and public relations.He said the number of Haj flights are exp...
RIYADH: Saudis from all walks of life are hopeful that the visit of Custodian of the Two Holy Mosques King Salman to the United States this week will strengthen relations between the two countries and ensure a peaceful and stable Middle East.Shoura C...
JEDDAH: Security forces killed a terrorist who tried to attack a security facility in Abqaiq on Friday, the Interior Ministry said.Sgt. Ali Al-Habeeb, 47, was killed during the confrontation with the attacker, identified as Nawaf Manahi Shabib Al-Ota...
ANKARA: Labor Minister Mufrej Al-Haqabani has said that unemployment among Saudis is relatively high, pointing to the negative impact of retreating oil prices on the economy and labor market. He confirmed that the Kingdom was continuing with the impl...
JEDDAH: The country’s newly elected municipal councils should have a say in selecting mayors and secretaries general of cities, participants at a Municipal Councils Forum suggested on Thursday.They proposed that the councils should compile a list of...
DAMMAM: Many Saudis have complained that while the Kingdom has attractive local tourist spots, several charge high prices, offer poor services and lack proper hygiene.They said that Taif, Abha, Baha, Jeddah and the Eastern Province have popular resor...

Stay Connected