By on March 22, 2012

After rumors from Renault and announcements by Nissan, Volkswagen lifted the skirt on its plans for the ultra-low-cost segment. Volkswagen wants to build cars for the €5,000 to €7,000 ($6,600 to $9,200) price bracket, development chief Ulrich Hackenberg told Germany’s auto motor und sport.

For a long time, Volkswagen execs and engineers were horrified by low cost cars. They were worried that this could cheapen a brand that had been laboriously “up-positioned” over many model generations. Therefore, the cheap skates will be sold under a new brand, Hackenberg says.

It is refreshing to see that Volkswagen finally got religion. After many years of trying to sell high priced small cars, Volkswagen now has realized that the key to emerging markets is to sell a lot of car for a low price. Hackenberg thinks of a three box car, “and you can turn that easily into a van. It needs to offer a lot of space.”

It will be interesting to see what brand Volkswagen will chose. It has a lot of dormant brands on file.


Meanwhile in Tokyo, Toyota’s CEO Akio Toyoda emphatically declared that his company will not jump to the cheap car bandwagon.

“To grow sustainably, we need to make a certain level of profit on cars, no matter how big or small they are,” Toyoda told Reuter’s hot shot reporter Chang-Ran Kim today. “When we think about what customers value in our cars, it’s reliability. We won’t risk sacrificing quality simply to meet a certain price range.” While Toyoda was at it, he heaped surprising praise on old nemesis GM:

“Until we overtook them (in 2008), GM was number one, uninterrupted since the 1930s. During that time, it helped the industry develop and created a culture of cars. That’s the kind of company that deserves to be the industry leader.”

Ah, the fine art of homegoroshi, or to praise someone to death.

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16 Comments on “Volkswagen Plans Low Cost Cars Under New (Or Old?) Brand...”

  • avatar

    SEAT seems also suitable. Škoda and SEAT are too similar tech- and price-wise and one could move down market.

  • avatar

    Manic, I think that SEAT is supposed to appeal more more performance-oriented drivers (sort of the VW version of what Alfa- Romeo once was) although this has been wishful thinking perhaps. It is a wonder that SEAT stays alive and I think that starting with a fresh sheet might be better. Škoda has a strong and successful family-transport image that I am sure VW would like to keep as it is. As much as I like the idea of DKW (originally Dampf-Kraft-Wagen, or Steam-Powered-Car!) coming back to life, it probably looks a bit too similar to BMW as a brand name. DKW was the largest producer of motorcycles in the world as well so if the VW Group ends up with Ducati they could revive this too. I really want to see the Auto-Union (nee DKW) 1000 SP come back: a two-cycle engine in a car heavily-influenced by the original Ford Thunderbird!

    • 0 avatar

      Yes,but there’s Octavia vRS and all Skoda,VW, Audi and SEAT cars share the same 120-200 hp engines, SEAT is not sporty or different enough. Actually, Skoda has been able to increase their prices to nearly VW level where I live because of successful models, same time SEAT doesn’t sell too well. Maybe when/if Southern Europe gets their act together again, future will be brighter for SEAT. I think it has still good enough image that would help to sell those cheap cars in future.

  • avatar

    Isn’t Skoda not VW low cost brand?

  • avatar
    Hildy Johnson

    “Ah, the fine art of homegoroshi, or to praise someone to death.”

    I’m not sure this is the right way to read his statement. Toyoda strikes me as a person with a lot of class, and maybe he is just paying respect where he feels that it is due.

  • avatar

    NSU = Wankel engines that fail in less than 50,000km.

  • avatar

    I wish that ’60 NSU belonged to me. I guarantee that thing is a chick magnet.

    BTW, my father grew up in postwar Eastern Europe, he has fond memories of his old DKW motorcycle.

  • avatar

    I’m guessing none of these companies’ sub-$10k cars will be “Comin’ to America”.

  • avatar

    As long as these cheap skates don’t include a VW electrical system, they might be OK.

  • avatar

    So Nissan is going to revive Datsun as their low cost brand. What VW’s low cost brand gonna be? KDF-wagen?

  • avatar

    Volkswagen looking for a brand regular Folks can afford when they want a Wagon

    If you made a movie about this, people would say the plot is farfetched

  • avatar

    Chevrolet successfully offered everything from stripped Novas to loaded Caprices. VW can do the same, keeping the name recognition of the VW brand, but using a new MODEL line name. That’s what Bertel would do if he were in charge.

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