Volkswagen budget brand: first car concept, design approved

German automaker Volkswagen has been gearing up to introduce a new budget brand with which it will target emerging markets. If latest reports are anything to go by, the company has taken a major step towards the development of its first car under the new brand by approving its concept and design.

Hans Demant, the executive in charge of the project said, "The concept and design are now in place. We will produce all components in China."

The car will initially be produced in China, which is the largest market for low-cost cars, and is likely to be priced from Euro 6,000-8,000. If the brand is successful, the company will expand its operations to other emerging markets, including India, where low-cost vehicles are in demand.

Volkswagen has been trying for more than a year to hit internal cost goals for the model. The company was finding it pointless to approve a car that did not meet in-house targets.

Volkswagen's aim is to become the world's biggest carmaker by 2018, but it lacks strong presence in markets like India and Southeast Asia, which are dominated by low-cost cars. The introduction of a budget brand might just help the company achieve its target.

Source: Reuters