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.