VW Planning New Ultra-Low-Cost Model To Take On Dacia, Datsun

Nissan sold 60,000 vehicles in Indonesia alone last year, and CEO Carlos Ghosn wants to increase that figure to 250,000 units by 2014. Even then, that would mark just a fraction of that market's exploding growth. Renault-Nissan also has its successful Dacia brand in emerging markets as well as Europe.

Volkswagen is paying attention. A spokesman for the automaker told Der Spiegel that an inexpensive line of cars has intrigued VW "for quite some time." The German brand sniffed around Proton for years and tried to get into low-cost models with Suzuki, but the Suzuki affair has probably seen more money spent on legal bills and arbitration than an actual product. According to Der Spiegel VW is looking at how to do it alone, and the launch of a range – perhaps a hatch, sedan, wagon and SUV akin to the Dacia lineup – could begin as soon as 2015. Pricing would need to come in at €6,000 to €8,000 ($7,784 to $10,379 U.S.). The new Dacia Sandero starts at €6,790 in Germany, a VW Up costs €9,975.

The major considerations are what to call it and how to build it. It would be tough for VW to stick to that price point and its current brand values, so it needs to figure out whether it should call such a line something else entirely or try and expand the customer perceptions of what "Volkswagen" means. After that, the automaker would need to determine whether any current factories and tooling could be repurposed, or if the cost involves building new operations. Unlike the acquisition of a new brand, however, the plan for a cheap car has the support of the head of the labor board, who told Der Spiegel "For emerging markets we need a car cheaper than the VW Up."