The plan to produce very cheap cars is not new. In the past years Volkswagen worked on plans to introduce low cost models in order to become competitive in Asian countries outside China. This weekend Volkswagen CEO Martin Winterkorn announced the launch of three cheap models. First the cars shall be sold in China, but that’s only the start.
After a long phase of planning, Volkswagen’s plan to launch cheap cars is ready to be implemented. “We’ll bring a budget car series on the market, with a SUV, a notchback and a hatchback, starting in 2018.” VW’s CEO said. “We’ll build the vehicles in China. The costs for one car will be between 8,000 and 11,000 Euro.”
Volkswagen will start selling in China. Decisions for sales in other markets are not final yet. Volkswagen worked on it’s plan to launch budget car’s for years. A cooperation with the partner Suzuki failed due to conflicts. In the end of the planning phase the questionable profitability of the budget series slowed down progress.
Budget Cars are the key to success in the further market development in emerging markets, not only in Asia. Volkswagen is the second largest car manufacturer after Toyota. Volkswagen makes a large part of it’s revenue in China, where VW is cooperating with local partners. Volkswagen’s market share in other Asian countries is comparibly low. The rest of the Asian market is dominated by Toyota. Volkswagen’s roll is comparibly small..