In 2012, Volkswagen began research into starting a budget brand in the vein of Datsun and intended rival Dacia, with the aim of having a full lineup ready for sale by 2015. Two years later, the budget brand has hit a budget wall, and that’s only the start.
Autoblog and Autocar report VW is having issues hitting safety and quality targets while maintaining the low-cost pricing — aimed between 6,000 and 8,000 euro; the Up above begins at nearly 10,000 euro — the automaker expects for the unnamed budget brand.
Though no business case has been found thus far, VW’s project is still under consideration as technicians pour over how similar rivals — including one-time partner Suzuki and considered partner Proton — are able to build low-cost vehicles without compromising on quality or price. Even though Renault-Nissan manages to be profitable with Dacia, VW is concerned that a low-cost car would erode their own margins.
Last year, Volkswagen announced they would work in a joint venture with Chinese automaker FAW to bring a budget vehicle to China by 2016; cost issues are affecting this effort, as well.