VW Wants to Launch New Global Budget Brand in 2014 with Cars Priced from €6,000 / $8,000

The VW Group announced this week that it achieved a 9.7 percent increase in its global deliveries from January 1 until the end of September compared to the same period last year. More specifically, it delivered more than 6.71 million vehicles; substantially more than 2011’s 6.11 million units.

“Our worldwide deliveries grew further in September with a particularly strong performance in Central and Eastern Europe, North America and the Asia-Pacific region”, said VW’s board member of sales Christian Klinger last Friday.

You may have noticed that Western and Southern Europe are missing from Klinger’s statement. That’s to be expected, since new car markets in countries like Ireland, Spain, Portugal and Greece have slumped.

Not even the mighty VW Group is immune from the euro crisis and, as a result, it has cut its 2012 sales projection by 140,000 vehicles.

All automotive analysts and industry executives alike agree that the situation in Europe will continue to deteriorate for at least the next two years, VW is reportedly ready to make up for lost sales.

Wolfsburg plans to launch an all-new budget brand that will build simple, cost-effective vehicles based on platforms, such as the PQ24/25/35, which have already been superseded in its latest models, but still offer more than adequate dynamics.

According to Car magazine, these “old” Polo-Golf platforms will underpin three vehicles: a saloon, an estate and an MPV that will be priced at €6,000, €7,000 and €8,000 respectively.

It’s not a novel strategy: Renault has already implemented it with the Dacia brand, which it acquired in 1998. Using Renault parts that were not cutting-edge but more than suitable for a budget car that would be light years ahead of the ancient, but cheap, Ladas that sold very well in Romania, Dacia delivered on its promise for a respectable €5,000 car.

The Clio III-based Logan, was officially launched in 2004 and it was a success. Even though Renault had stated that it was wouldn’t be available in Western Europe but in emerging countries, it soon changed its mind.

The reference to Dacia is no coincidence, as VW’s 13th brand will follow, more or less, the same guidelines: back-to-basics cars with no amenities, apart from front airbags and ABS, as standard equipment to keep the price low. Those wanting features like air conditioning will have to pay extra.

The British publication reports that all engines will comply with EU6 emissions regulations and the styling will be boxy and simple to reduce the number of pressings by 50 percent compared to those used in the new, and much more expensive, Golf Mk7.

The final decision won’t be taken until the end of the year and if it gets the green light, the new brand, which doesn’t even have a provisional name yet, won’t enter the market before 2014.

Sources from Wolfsburg have also revealed that a compact car will also join the brand’s line-up and be introduced in Europe.

The automaker, which already manufactures market-specific models like the Gol in Brazil and the Vento in India, is not worried at all about it interfering with VW’s new Up! city car. That’s because it will be considerably bigger (around 4.0-4.2 meters long) and aimed at a completely different set of buyers than the premium VW.

By Andrew Tsaousis

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