Europe’s largest automaker, VW has been trying to develop a car codenamed as ‘Budget Car’. Specifically targeted for emerging markets, the car finally gets green signal for its concept and design development. Initially targeted cost of Budget Car was $8300 (approx 5 lakh INR). VW Budget Car was in trouble of getting green signal due to its budget limits and finally it is approved for design and development stage.
VW has been trying for a year to limit the final cost of the car and after many months of every component cost optimization, the company has finally showed green signal to the Budget Car. To ensure low cost, VW will manufacture all components of this car in China only. VW might introduce a separate budget car brand for this car just like Nissan did with Datsun. Global automaker lacks a strong presence in emerging markets like south-east Asia and India. New Budget Car will hit China market first and then will be routed to other emerging markets for budget cars. Considering safety ratings, the company claims that Budget Car will be at par with the competition.
VW plans to become world’s largest automaker by 2018, but without Budget Car, this goal seems a bit far-fetched. If business case of Budget Car shows the prospect growth to VW, the company will bring Budget Car in the market by 2017. VW has not finalize about name of Budget Car’s brand. In 2013 Tokyo Motor show VW officials hinted that by end of 2014 VW will announce a new budget car brand. Expect an announcement from VW Budget Car brand that will sit below Skoda and Seat under VW group umbrella.
It is obvious that new Budget Car brand will also incorporate VW group’s MQB (Modular Transverse Matrix) platform to save cost of design and development of common parts which are under the style of the car. Renault-Nissan alliance’s budget brand ‘Dacia’ will be VW’s prime target for low cost car that also uses CMF (Common Modular Family) architecture.