VW sees 'world-car' as emerging-market star

3-K project aims for production costs of just 3,000 euros as the VW board examines the global plan

Wolfsburg, Germany. Volkswagen is developing a low-cost, roomy entry-level vehicle for emerging markets.

With a production cost of 3,000 euros per unit, the so-called 3-K vehicle would be significantly cheaper to produce and have "much more trunk space" than the VW Fox, a source said.

Karl Hirtreiter, a senior VW product manager, is in charge of the entry-level strategy at the company. The 3-K is supposed to be produced in China first, beginning in 2008. India and Malaysia are considered important sales markets. Exports to Germany are not foreseen.

The four-door vehicles would be built on simple, technically identical platforms, but with regional variations in body styles to suit different markets. Prices will depend on currency rates and local competitive factors. They will be set just prior to the 3-K's launches.

VW group Chairman Bernd Pischetsrieder has commissioned the development of a "global development plan" to better prepare the company for new competitors and the risks of currency fluctuations. VW wants to figure out where it should produce what automobiles, based on various currency-rate scenarios.