Volkswagen plans low cost brand for emerging markets image

Volkswagen AG, Europe’s largest carmaker is working on low-priced small cars that will be available from EUR 5,000 in emerging markets, according to a report in a German automotive magazine.

In India, we are building the Vento and a localized version of the Polo which costs only about EUR7,000,” Ulrich Hackenberg told the magazine, adding that in China the company is planning a cost effective car about the size of Seat Toledo.

The trick is finding the right amount of content to take out of the car to make it affordable, he said.

Hackenberg said no decision had been made whether such a car, most likely a roomy sedan that could also be built in a van body style, would be manufactured with a Chinese partner.

The announcement comes shortly after Nissan, Japan’s second- biggest automaker, said it will revive its Datsun brand after three decades to increase sales in emerging markets.

“Datsun will officially begin sales in India by 2014 in the entry hatchback segment with a price under Rs 4 lakh to tap high growth market,” Nissan Motor India managing director and CEO Kiminobu Tokuyama told reporters here.