VW Budget Brand Hitting Budget Wall, Still Under Consideration

Cameron Aubernon
by Cameron Aubernon
vw budget brand hitting budget wall still under consideration

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.

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4 of 15 comments
  • Npbheights Npbheights on Mar 03, 2014

    My thoughts exactly! I thought VW WAS the budget brand. It's not as if Volkswagen Group has any shortage of brands under which to sell their premium and expensive cars...

  • 05lgt 05lgt on Mar 03, 2014

    If this can lead VW to actually confront thier issues with delivering quality and safety on a budget across the board it's the best thing they've ever done. They've blamed the customer for so long. Maybe actually seeing that others are doing what they think is impossible can help?

  • TMA1 TMA1 on Mar 03, 2014

    Clearly, the Phaeton buyer will not tolerate anything less than a Polo buyer at the same dealership.

  • Stanczyk Stanczyk on Mar 03, 2014

    VW got into mess with their 'lower brands'... All 3 of them ofer basicly the same cars(with minor exceptions). Skoda is right now the cheapest .. and I don't see a reason why it needs to chase VW in terms of style .. etc.. VW have no idea what is SEAT's role in their portfolio .. They make and adds that shows 'spanish AutoEmotion', but the thuth is that it shares engines and equipment with SKODA and VW..and for that reason this brand is nothing special ..and sells badly.. They should make 'more exciting--sporty' brand of it(hot-hatches, coupes, and maybe some 'uber-sedans').. SKODA should go back(down) to 'budget level' and VW-brand should stay where it is now .. 'Ordnung must sein!:) .. BTW: Car-producers want to go with this 'new-wave' of 'global budget brands' to 'emerging markets', or maybe they just starting to prepare cheaper cars for 'brand new world' (world after 'global financial armageddon' ? :)