VW working on "fit" of its budget brand, final stages of development - IAB Report

SUV and MPV could be key bodystyles for the brand.

Speaking to the media prior to the Auto Shanghai 2015, VW China's Chief Executive, Jochem Heizmann, said that the German car maker will not beat the industry growth in China this year. Last year, growth in the Chinese auto industry came primarily from budget SUVs and MPVs - segments where VW is not present in.

Heizmann told reporters that the company aims to address this issue with not one or two cars, but an entire "product family". Reports have long stated that VW is working on a budget brand targeted at the Chinese market, though board members and investors are yet to sign off on this project.

Speaking exclusively to Indian Autos Blog in Shanghai this week, Dr. Heinz-Jakob Neusser, Member of the Board of Management for the Volkswagen brand with responsibility for “Development”, said -

We’re actually working on the budget brand. We haven’t made the decision up to now, but we’re improving the situation from the fit of the car to the market to the commercial segment.

"We’re focussing on China", he said when questioned about the budget brand's target reach.

Reports point out that VW's budget brand would be much like Renault's Dacia, wherein platforms of previous generation cars are used to make new top-hats with design, feature and powertrain changes tailor-made for the intended market. For instance, the platform that is the foundation to the Sandero, Duster and Lodgy is made using components from phased out Meganes and Clios.

Also read: 2015 VW Phaeton showcased at Auto Shanghai 2015

Last year, over 2.76 million VW-branded vehicles were sold in China and Hong Kong, a marked increase of 10 percent YoY. VW is present in China through two main joint venture: FAW VW and Shanghai VW.