By on October 12, 2012

Volkswagen wants to go back to its “People’s Car” roots, and plans to launch a new low-cost brand by about 2015, Reuters says. With a a price range of between 5,000 and 10,000 euros ($6,500-$12,900), Volkswagen wants to emulate the success of Renault’s Dacia. Nissan resurrected Datsun as a low-cost brand to help gain market share in lucrative emerging markets.

Volkswagen’s low cost cars would target the BRICs, but may also be sold in Europe, sources told Reuters.

According to Manager Magazin, Volkswagen is planning a budget sedan, wagon, and mini-van. It will lack pricey gadgets such as head airbags and air conditioners. Older engines and older, amortized platforms would be used.

By the time Volkswagen comes out with its low cost contenders, Renault/Nissan may already have hit a new lower price point. There have been ongoing rumors of Renault working on a car that in the €2,500 ($3,250) area. The most interesting engineering feat: Renault/Nissan can make decent money on a car that goes for petty cash.

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26 Comments on “Back To The Roots: Volkswagen Plans Budget Brand...”

  • avatar

    ummm they already have a budget brand. it’s called skoda. Seriously what is up with VW sabotaging Skoda? Theyve gotten in trouble sometimes because their products are too good…

    • 0 avatar

      Nope. Škoda is “budget brand” when compared with Volswagen. And Volkswagen is quickly moving to the semi-premium territory, leaving Škoda to compete with brands like Renault, Opel or Kia.

      Even the “cheap” and “decontented” Rapid is standing nearly head-to-head with Ford Focus or Opel Astra, price-wise and in many aspects, also technology-wise. Downsized turbo engines or dual-clutch transmissions are not exactly budget-brand stuff. And it is very likely that the new Octavia won’t be anywhere close to this level of decontenting – it will probably be more “hi-tech” than American market VWs.

      Seat, with its lousy sales and image, could become the budget brand, but even that is probably too good for such a role. The IVG needs a brand below these two…

      • 0 avatar

        By the time 2015 rolls around, large portions of the European Union’s CORE (large swathes of Spain, Italy, Portugal, Ireland– even many rural areas in France & Britain) will be ebbing closer to emerging market living standards than developed nation standards.

        Whether the EU holds together, or not, and regardless as to how many euros the ECB prints, it’s not possible to fix a real economic output contraction (caused by savagely declining aggregate demand– and no, Paul Krugman, governments CAN NOT reverse declining aggregate demand) by increasing the credit OR fiat supply.

        So, do not be surprised if large portions of what is now deemed to be the core of the EU buys vehicles that are now more likely to be seen in emerging economy nations, assuming the EU is even able to be kept together with chewing gum and paper clips for much longer.

        Northern Europeans will turn on their politicians– not figuratively, but literally– if their politicians actually try to force the north to bail out the south (via debasement of the common currency which = debasement of living standards).

      • 0 avatar

        I thought VW IS a budget brand. Only on TTAC can a Nobel Prize winning economist get schooled! I feel smarter already!!!

      • 0 avatar

        If you really want to see the fraud that Krugman is and always has been, there’s no “schooling required.”

        It’s literally impossible to discredit Krugman more than he has discredited himself; merely google “Julian Simon, and Paul Krugman, Remembered” from R21 – Thoughts on the Renaissance of the 21st Century.

  • avatar

    Wow, I remember when Volkswagen was a low cost budget brand.

    • 0 avatar

      VW’s in their early days were so well crafted that they were never really cheap. In Canada they were generally priced near the top end of the small imported car segment. Other Euro cars such as Renault, Simca, Austin, Hillman, etc, along with the wave of Japanese imports in the late 60’s (Datsun, Toyota, Isuzu, etc) were all for the most part less expensive. VW’s may have had fewer features than many competitors, but commanded a price premium due to perceived quality. A reputation not undeserved, because in the 1950’s and early 60’s they were one of the best assembled and most reliable cars in the world. You could run your hands anywhere on the car without finding a sharp edge. Even the hidden areas were nicely finished.

      • 0 avatar

        VW really did use high quality materials in their cars. German square weave carpets, rich seat fabrics, nicely finished door panels, etc. They decontented their cars pretty badly in 1968 though, and they got cheaper from that point on – the Beetles at least.

  • avatar

    VW is a triumph of marketing. Where I am, a VW Golf or Polo is a sign of hipster good taste… like an iphone.

    Skoda isnt in North America and they are generally priced almost the same as VW. You just get more metal for your money… that is, you can get an Octavia for the price of a Golf so its not exactly cheap, just better value.

  • avatar

    Skoda is nowhere near an emerging-market brand. And VW will not want to devalue it after 20 years of turning it into a desirable brand.

    DKW anyone? Das Kleine Wunder …

  • avatar

    They were a pioneer in this field here. They abandoned it. Too much competition now and they aren’t planning it for here anyway.

    Day late and a dollar short. Seems fairly unimportant to anyone not associated with or fanboy of VW.

  • avatar
    el scotto

    Is the race to the bottom another twist in the road to Total World Domination?

  • avatar
    Felis Concolor

    Now that’s a proper color palette!

  • avatar

    These prices are well into Tato Nano territory, and possibly beating it by a healthy margin. Just how are they going to accomplish that, exactly? By magic of German factory worker?

  • avatar

    I don’t see why Skoda isn’t the ideal solution. They could have thier current model line and budget cars in emerging markets. Ford is considering a budget subcampact in addition to its Fiesta. Its also not uncommon to have subbrands within a marquis; such as the Prius family that are Toyotas, or even Corvette and Mustang are sub brands. Bottom line, VW does not need a 13th brand

    • 0 avatar

      If Nissan thinks it can build a $3000 Datsun (the price of a Nano), a $6500 model by VW should not be that difficult. Built in the 3rd world, of course.

      • 0 avatar

        The Volkswagen Sedan (the old, Type 1 Beetle) was going for about $7,000 new in Mexico less than a decade ago, and inflation hasn’t been that bad. They’ve basically already done it in the recent past.

  • avatar

    I’d think if VW wanted to downgrade any of their brands it’d be SEAT before Skoda. Granted they’ve both had a lot of money invested in turning them into a sport (SEAT) and value (Skoda) line, but the former’s a slower seller and does have a history of building old FIATs while Skoda – despite it’s history on the wrong side of the iron curtain – designed and built their own material, and raced it.

  • avatar

    VW has already to some level been doing this. A bit like the comparisons of the new Datsun with the Mexican Nissan Tsuru, the new VW cheap brand could start with for example the VW Citi Golf.

  • avatar

    Does this mean the Up! will need to be re-branded?

    • 0 avatar

      Nope. Up! is not even remotely a budget car. It’s actually quite expensive for its class.

      And by the way, $6500 car is nothing that would require Tata Nano level of simplicity. Here in CZ, a Renault Thalia costs about $7,700, even with 20% VAT. And it’s still something that can be considered a “real car”.

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