Volkswagen inches closer to China-built affordable brand image

After the German automaker incurred delays due to the company’s desire to make engineers cut sufficient costs to ensure the brand’s desired profitability, Volkswagen AG has now made progress towards establishing the entry-level brand in China, the world’s largest auto market.

According to comments by Volkswagen Group chief executive officer Martin Winterkorn made during the 2015 edition of the Geneva International Motor Show, the carmaker will offer an update on the project “in the foreseeable future.” The brand’s development was unveiled three years ago as the automaker sought to increase its Chinese market share and possibly attract a larger customer base in other emerging markets in the region. Since then, the company – which usually has the namesake VW brand playing in the upper level of the mass-market sector – fought to cut costs and reach a desired level of profitability for the brand’s first nameplate. Back in 2013, Winterkorn said the car would have a price ranging between 6,000 and 7,000 euros ($6,500 to $7,600)and last year he updated the project by announcing the basic concept and design of the vehicle had been approved, with scheduled production in China’s factories.

The introduction of a no-frills budget brand would mark a strategy swing at the automaker, which has constantly relied in recent years on the higher profits achieved by the premium and luxury brands Audi, Porsche and Bentley. The group is currently the largest foreign automaker in China, producing cars under the VW, Skoda and Audi brands with local partners FAW Car Co. and SAIC Motor Corp.

Via Automotive News Europe