Volkswagen is said to have agreed on the basic concept and design of its budget car for emerging markets, with the project nearing completion after a long gestation period in which it struggled to meet cost targets.
It appears that China will play a major role in the automaker’s budget car project, as the vehicle and all of its components will be built there. China is the biggest market for low-cost cars. “The concept and design are now in place. We will produce all components in China,” project manager Hans Demant told Reuters at the Beijing Auto Show.
Demant’s statements are more optimistic than those of VW brand development chief Heinz-Jakob Neusser who said at last month’s Geneva Auto Show that hitting cost goals for the budget car was becoming increasingly difficult. Neusser added that it made no sense to approve a vehicle that was not meeting in-house targets.
Volkswagen has been trying for more than a year to hit internal cost goals for its budget car, which is expected to sell for between €6,000 ($8,300) and €8,000 ($11,050). VW doesn’t have a strong presence in markets such as India and southeast Asia which are dominated by budget models. Analysts have questioned whether the VW Group will be able to meet its goal of becoming the world’s biggest automaker by 2018 without a successful budget car.
By Dan Mihalascu
Note: Chinese-market VW Santana pictured