Report: VW Introducing Budget Brand for China

Volkswagen has been thinking about a budget brand to challenge its European rivals for some time now, and it seems it’s finally decided to go ahead with the plan.

The 14th brand is expected to come within the next two years and will start off with a sedan followed by two SUVs. The sedan is expected to start at around $10,500.

The main hurdle to getting a budget brand off the ground was always the thin margins, but China, as it always does, has allayed those fears. Volkswagen will partner with its Chinese partner FAW to build the cars.

If the venture is a success, you might someday see the cars in other markets, though not America. India is likely the next big target, but the brand will have to play second fiddle to Skoda, whose partnership with Tata makes it the leading Group brand in that market.

[source: Motoring]