Volkswagen Budget Brand on Hold

By | February 28, 2014
With some of the top luxury automakers producing vehicles under $30,000 to target a younger buyer, Volkswagen has decided to try its hand at producing a budget vehicle. However, unlike its competitors, the German automaker plans to create an entire budget brand within the automotive group. The problem? Finding a balance between budget targets and safety and quality levels. Thanks to the struggle to hit budget targets while offering an expected array of basic features, there currently is no sound business case for Volkswagen Group to produce the proposed vehicles. While the project isn't being cancelled, it is still under consideration. Volkswagen has been trying to replicate what other automakers have done, with creating a high-quality vehicle with a low price point that doesn’t drive up costs. Suzuki, the German automaker's partner, has been able to do this, as has Renault and Nissan with their Dacia and Datsun brands. Volkswagen Group wants to build a direct rival to the Dacia, and will need to find that elusive balance.
By developing a budget brand within the group, Volkswagen Group will be able to enter new markets, including China, India, and Asia, while beefing up its lineup in Eastern Europe, Africa, and the Baltic region. We expect the company to keep working on this issue until the problem is solved. Source: Autocar UK