Volkswagen plans new brand

Following the trend by General Motors and Honda, its now Volkswagen’s turn to start China-specific new car brand. According to Volkswagen, this new brand will be exclusive for small cars to be sold in the Chinese domestic markets.

In a report published in a German magazine, the motto of the new brand will be "Volkswagen für die Volksrepublik" - Volkswagen for the People's Republic.

With the new brand, Volkswagen plans to manufacture new small cars to be sold in segments namely for the increasing number of Chinese consumers mainly outside of large Chinese cities like Shanghai and Bejing where small car sales have seen a rise.

Currently, Volkswagen sells its cars under its own brand but as per the mandate by the Chinese law, it has a partnership setup with a Chinese local partner for producing cars in a joint venture. Also, the Chinese government plans to increase the market share of local brands from a current 30% to 40% in the next four years. According to Volkswagen, a new local brand would help them as an opportunity to enter new market segments.

Other automakers like Honda and GM have already begun developing new local brands with their Chinese partners. Guangqi Honda, a partnership between Guangzhou Automobile Group and Honda Motor, has announced the Everus brand which begins the sales of the S1 model early this year. And SAIC-GM, GM’s joint venture with Shanghai Automotive Industry Corporation, has unveiled the Baojun brad which will also release its first model this year, the 630 based on the Chinese Market Buick Excelle.