German media are abuzz with reports of an upcoming value sub-brand from the Volkswagen Group, targeted at Renault’s Dacia line-up. This new low-cost brand would join the Group’s already extensive family, which includes the likes of Volkswagen, Skoda, SEAT, Audi, Bugatti, Bentley and Lamborghini.
Der Spiegel, citing comments from VW spokesman Eric Felber, reports that the German OEM is poised to make an official announcement. Felber is quoted as confirming that the Group has long been considering a low-cost brand, which could prove helpful in expanding market presence in areas such as India, Latin America, Africa and Eastern Europe. Of late, Russia has emerged a key growth driver for many brands while much of Europe stagnates. A strong entrant in that market could prove exceedingly useful for any OEM.
So far there has been much speculation but no official confirmation. Autocar reports one unnamed insider at Volkswagen as stating that the new brand could be based on models developed for the Chinese market. Speaking to German newspaper Handelsblatt earlier in October, Bernd Osterloh, Chairman of the General and Group Works Councils of Volkswagen AG, stressed the importance of a model positioned below the current up!, which would be targeted at emerging market.
VW is not the only major OEM looking to target first time buyers in emerging markets through a lost-cost offering. Nissan is pushing ahead with plans to revive the Datsun brand, with the initial model costing just US$3,000-US$5,000. The Datsun line-up will offers six budget-priced models starting in 2014. The budget plan that VW is proposing would likely cost between €5,000 and €10,000 (US$6,500 and US$13,000).
