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Wednesday September 23, 2020

updated - September 23, 2020 Wednesday EDT

Volkswagen to Build Low Cost Cars in China, Considering Introducing Line to Other Markets

Jun 29, 2015 09:37 PM EDT | By Don Gil Carreon
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Volkswagen, china, low-cost cars
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Volkswagen plans to build low-cost cars in China.
(Photo : Sean Gallup | Getty Images News)

German automaker Volkswagen will build a line low-cost cars in China aimed for that market and Southeast Asia by 2018, its chairman said.

Citing an article on German newspaper Bild am Sonntag, Reuters reported that Volkswagen Chairman Martin Winterkorn announced the company's plans to unveil a family of low-cost cars that include a sports utility vehicles, saloon and hatchback.

It added that the vehicles are planned to be produced in China and will cost between 8,000 euros to 11,00 euros, higher than its earlier projectin of 6,000 to 8,000 euros. Winterkorn was cited saying that the cars may be introduced in other markets as well.

Reuters noted that Volkwagen, Europe's largest automaker, had long been considering budget cars, but keeping production within targeted costs to ensure desired profitability has prevented the company from going forward with the plan. 

In April, Reuters also reported that Volkswagen was considering teaming up with China automobile maker Great Wall Motor Co. to build low cost vehicles for the market. The German company was said to be interested in buying a stake in Great Wall as an option.

The company had also explored a partnership with Japanese automaker Suzuki Motor Corp., but nothing came out of it. The company originally wanted to become the largest automaker in the world by 2018, with the low cost cars an important component of the plan. The company does not have a strong presence in India and Southeast Asia, where there are strong demand for no-frills cars. Volkswagen's financial performance is largely driven by its premium brands such as Audi and Bentley.

As of last year, the company's cheapest car is the Up!, which is only available in Europe and Japan. The, two-door car is said to be Volkswagen's smallest cheapest  and was launched in December 2011.

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