VW may add budget subbrand by 2015, sources say
Low-cost range could include minivan, wagon
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BERLIN (Reuters) -- Volkswagen may launch a new low-cost subbrand by 2015 to take on rivals including Renault's Dacia and Nissan's Datsun in markets including Europe, two company sources said on Friday.
Europe's biggest carmaker is aiming for a price range of between 5,000 and 10,000 euros ($6,500-$12,900) for the budget cars, which may include a minivan, wagon and small sedan, the sources said, confirming a report in German business daily Handelsblatt.
The vehicles would be aimed at fast-growing BRIC nations (Brazil, Russia, India, China), but may also be sold in Europe, the sources added.
"We're regularly looking at new segments and interesting markets which also include so-called budget cars," VW spokesman Eric Felber said. "But a decision has not been taken yet."
According to a report in German publication Auto Bild, the budget subbrand will be built using older engine and platform technology and cars will be offered without extras including airbags and air conditioning, to help shave costs.
VW lacks a strong presence in markets such as India and Southeast Asia, which have mature and growing small-car segments. VW's partnership with Suzuki, which was supposed to help the German company grow in India, where Maruti Suzuki is the No. 1 brand, fell apart last year.
Low-cost vehicles from Dacia as well as budget brands such as Kia and Chevrolet are gaining in popularity in western Europe because of the pinch felt by consumers in the economic downturn plaguing the region.
The cheapest car currently sold by the VW Group is the Skoda Citigo minicar, which part of the New Small Family range that includes the VW Up and Seat Mii models. The Citigo starts at 8,890 euros in Germany, but at only 3540mm long, it is less practical for many consumers including families. The new subbrand cars will be between 4000mm and 4200mm, Auto Bild reported.
"We need a budget car below the Up for developing markets," Bernd Osterloh, head of the VW works council, was quoted as saying in the Handelsblatt report.
VW aims to surpass Toyota and General Motors to become the world's biggest carmaker by 2018.
Automotive News Europe contributed
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