Volkswagen Budget Brand To Be Announced Soon: Report

Talk of a new sub-Volkswagen budget brand for the Volkswagen Group is strengthening; reports out of the UK this week suggest an official announcement is due soon.

TMR first reported the likelihood of the new brand in October, with the German giant expected to take a similar path to Renault’s re-introduction of the Dacia brand, and Nissan’s planned return of the Datsun nameplate.

Such a brand would be the thirteenth for the Volkswagen Group. UK mag Car suggests that the move is being driven by increased global demand for sub-€10,000 (AU$12,400) vehicles in the 'new' powerhouse economies.

Worldwide sales for such budget models amounted to 8 million units in 2012, representing 13 percent of the entire global market.

Such models account for 30 percent of the world-leading Chinese market, a tally of over 3.8 million units, and 48 percent of the Indian market, with 1.2 million sales.

In Russia, budget models hold 38 percent of new car sales with 900,000 units. Another of the so-called BRICs - the booming Brazilian market - is likely another key target for the expected brand (along with other South American markets). 

Conversely, sub-€10,000 (AU$12,400) vehicles account for just three percent of the European market (400,000 units), despite its current economic woes.

Established leaders in this budget segment include Dacia, Lada, Proton, Chevrolet, and Suzuki, along with Perodua and Maruti who respectively manufacture Daihatsu and Suzuki models under license.

Chinese brands Geely, BYD, Hawtai and Brilliance dominate the Chinese domestic market, but are yet to establish a significant presence in export markets.

Given the might of the Chinese market, Volkswagen is likely to team with existing Chinese partners Shanghai Automotive (SAIC) and First  Automotive Works to establish its thirteenth brand.

These alliances could see the ‘Tantus’ nameplate used for the expected global budget brand, which is already set to be used on upcoming electric vehicles co-developed with SAIC.

Volkswagen Group is expected to use previous-generation technologies to underpin the new brand’s models - their amortized development costs leaving room for profitability.

These models are all expected to be larger than the existing Volkswagen Up/Skoda Citigo twins, and use an enlarged version of the previous-generation Polo and current Skoda Fabia light cars’ Volkswagen Group PQ24 platform.

Planned models reportedly include a €7,000 (AU$8,700) small sedan, €7,500 (AU$9,300) small station wagon, €8,000 (AU$9,900) small people mover, and €9,000 (AU$11,100) small crossover.

A ultra-budget three door hatch for the Indian market has also been rumoured.