Europe crisis alters VW product plan
In a sign that Europe's economic crisis is beginning to cause pain at the German auto giant, Volkswagen Group is changing its product plans at opposite ends of the price spectrum.
European media reports last week said VW is considering launching a low-cost subbrand by 2015 to take on rivals such as Renault's Dacia brand in Europe and in emerging markets. At the same time, Bentley's and Lamborghini's plan to launch superluxury SUVs may be put on hold to save cash for parent VW Group.
VW is aiming for a price range of about $6,500 to $12,900 for the budget cars, which may include a minivan, wagon and small sedan, sources told Reuters, confirming a report in German business newspaper Handelsblatt.
The vehicles would be aimed at Brazil, Russia, India and China but may also be sold in Europe.
"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 would be built using older engine and platform technology and cars will be offered without extras such as airbags and air conditioning, to shave costs.
The cheapest car currently sold by the VW Group is the Skoda Citigo minicar, which is part of the New Small Family range that includes the VW Up and Seat Mii models. The Citigo starts at the equivalent of about $11,450 in Germany.
"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.
On the superluxury side, Bentley and Lamborghini rolled out SUV concepts at auto shows in Geneva and Beijing this year. A production decision has not been made by VW's management board.
Bentley declined to say whether the SUV would be delayed. Lamborghini CEO Stephan Winkelmann told Reuters that even though VW has yet to sign off on the Urus, the Italian manufacturer would continue with development.
Grappling with unforeseen production cuts and slowing auto sales, VW may postpone the models as it reviews planned spending on equipment, factories and vehicles. The plan is scheduled for a vote by VW's supervisory board on Nov. 23, two company sources said.
Reuters contributed to this report