VW management has just signed off on a budget car project which has been a work in progress for some time now. The management has been struggling for more than a year to meet internal cost requirements for the budget car, which may be sold for between EUR6,000 and EUR8,000. It may be produced in China, the biggest market for budget cars.
VW brand development chief Heinz-Jakob Neusser remarked at the 2014 Geneva auto show that it was becoming harder to hit cost targets for the budget car, adding it made no sense to sign off a vehicle that was not meeting in-house targets.
VW does not have a strong presence in markets like India and southeast Asia, which are ruled by no-frills models. Analysts have also questioned Volkswagen’s ability meet its goal of becoming the world’s largest carmaker by 2018 without having a successful budget car.
A VW spokesman quipped that the German carmaker was working vigorously to develop the budget car, noting that a decision had yet to be taken.
