Volkswagen plans budget car; it will cost up to 8,000 euros image

The management board of the German automaker Volkswagen might give the ok for the budget car aimed at emerging markets, Germany’s Manager Magazin reports.

It has been a long struggle for the German automaker to meet the cost targets for this budget car. Volkswagen’s senior executives will give the final approval in several weeks and by the summer the supervisory board is to sign off the project.

The German giant has tried for more than 12 months to reach the internal costs requirements for this budget vehicle, which is expect to have a price varying from 6,000 euro to 8,000 euro. The car will be manufactured in China, considered the biggest market for affordable vehicles.

Heinz-Jakob Neusser, VW’s brand development chief, said on March 4 at the Geneva auto show that the company was in difficulty of reaching the cost goals for this car and that it made no sense to give green light to a vehicle which was not in accordance with the in-house cost target. VW plans to expand in markets such as southeast Asia and India, which are dominated by affordable, no-frills cars.

Not having a successful budget car makes analysts doubt of Volkswagen’s plan to become the largest automaker in the world by 2018.

On the same time, Nissan said its Datsun low-cost vehicle is now available in India, where the little vehicle starts at about $5,000. The so-called “Go” model is powered by a 68 hp 1,200 cc three-cylinder engine. The automaker plans to introduce the GO+, a wagon-style model later this year.

“We plan to have at least 145 dealerships across India by the end of 2014,” Kenichiro Yomura, president & CEO at Nissan India said.