According to a report coming from Germany’s Manager Magazin, the German automaker Volkswagen is mulling a partnership with China’s Great Wall to develop and produce a new entry-level model.
The Manager Magazin cited for the report insider company sources, though the people disclosing the plans kept their identities private, as the moves are not yet public. The budget model outcome, according to the publication, could have Volkswagen purchasing a portion of Great Wall. Volkswagen’s China boss Jochem Heizmann commented recently on the sidelines of the ongoing 2015 Auto Shanghai motor show in China that the company was now aiming to develop budget sport-utility vehicles (SUVs) and multi-purpose vehicles (MPVs) in the country to remain the best-selling foreign automaker in the largest auto market of the planet. Volkswagen, Europe’s largest carmaker and the second biggest in the world, has been deadlocked in its attempt to bring to life a budget model that could cater the needs of emerging markets – a critical piece of the puzzle it has started to build to become the top selling automaker by the start of the next decade.
According to analysts, moving to partner with Great Wall, an established Chinese automaker is a sensible move o n the budget car offering, with the German carmaker proving its problems in developing and engineering an entry-level car – a segment where Chinese automakers have great experience. GW, also with experience in producing SUVs and crossovers, would allow VW to tap the growing market of entry-level all-wheel drive models, with retail sales of the segment jumping since 2012 and outgrowing the other traditional sectors of the market.