China May Get A Low Cost Volkswagen

Spurred by the prospect of having no competitor for Dacia and Datsun cars, VW is exploring their options. Reuters claims that a small sedan, a van and a wagon are under consideration. “More than 3 million so-called budget cars are sold in China every year, making it the biggest market in that segment,” says Reuters. VW wants to play.

While VW is a big player in China, it lacks a presence in India and Southeast Asia, two booming markets where a low-cost car is important. The up! is positioned as a more premium option in the small car space, and would be unsuitable for the task.

A few concerns lay ahead for VW; first, would it keep the VW badge? Rumors say it wont, and is looking for a new (or bsrely used old) brand. Second, how would VW develop it on the cheap? Reports indicate that existing technology would be used, but it’s hard to fathom that anything other than old platforms and engines would enable VW to do it profitably.

Possibly the biggest problem for VW: 10,000 EUR may be regarded as “low cost” in Europe, but it is rich in developing markets. Renault is working on something much lower cost …