WOLFSBURG, Germany - The development of Volkswagen's answer to the low-cost Renault Logan sedan will be one of the first tasks for new VW brand boss Wolfgang Bernhard.
Despite company denials, sources say VW is developing cars for the low-cost segment.
By year end , the VW board will be presented with concepts for a car that will rival the Logan. Renault is marketing the Logan in western Europe priced from $9,288 and in developing countries priced from $6,192.
VW could launch a low-cost car for less than $9,907 by 2008. The model would be built in China or Brazil and exported to both Western and developing countries. The new model would be cheaper than the Brazil-built Fox, which VW will introduce in Europe next year priced at about $12,384.
VW's recruitment of Bernhard, the former Chrysler group COO, signals a major shake-up in the group. Bernhard will join VW's board on Feb. 1.
Volkswagen AG CEO Bernd Pischetsrieder recently told a small group of top managers about the changes at a meeting in Warsaw.
A meeting participant said that board member Hans Dieter Poetsch described VW's financial position as "worryingly grim."
Bernhard will take over the VW brand, leaving Pischetsrieder free to steer Volkswagen AG back on course.
It's not just the members of the VW unions that are worried about the appointment of Bernhard, who has a reputation of being a "cost killer." Some of the automaker's top managers may have to fear for their jobs.