VW and FAW to Introduce New Budget Brand in China image

According to anonymous sources VW plans to manufacture with its JV partner FAW vehicles for a planned Chinese budget brand.

The sources said that VW plans to introduce the new low-cost brand in China in the following three years, with plans to further expand it to several models. VW heavily relies on China, where it wants to surpass GM and Toyota and become the largest automaker by sales in this region by 2018. Currently China is VW’s largest market, accounting for 31% of the automaker’s sales totaling 9.21 vehicles in 2012. VW has two JVs in China, one with FAW and one with SAIC Motor.

“We want to bring a true budget car to the market in China in the foreseeable future – a particularly affordable entry-level model for 6,000 euros ($7,785) to 7,000 euros,” Chief Executive Officer Martin Winterkorn said at the Wolfsburg, Germany-based company’s annual meeting last month.

VW is increasing deliveries in the Asian country, where it wants to build seven new plants. In an attempt to offset losses in its home region, VW will introduce this year 60 new and updated models, including fresh versions of the Skoda Octavia family car, the Audi A3 compact and the Golf hatchback.

Source: Bloomberg