VW plans budget brand to rival Dacia

The Volkswagen Group is close to announcing the establishment of a new low cost brand to rival the likes of Dacia, according to a report by Germany’s Der Speigel magazine.

Citing comments made by Volkswagen spokesman, Eric Felber, Der Speigel says the German car maker harbours firm plans for a future Dacia-rivalling brand to complement those already within the Volkswagen Group portfolio, including volume driven brands such as Volkswagen, Skoda, Seat and Audi.

“The idea of a low cost brand has been on the agenda at Volkswagen for some time,” Felber said, adding, “A decision has not yet been made.”

Rumours are the Volkswagen Group could use a new low cost brand to further penetrate potentially lucrative Asian, Indian and Latin American markets, as well as expand its sales presence in Eastern Europe, the Baltic region and Africa.

One scenario, according to an insider at Volkswagen’s Wolfsburg-based headquarters in Germany contacted by Autocar, is using models developed for the Chinese market, including the soon-to-be-revealed replacement for the long serving Santana, as a basis for the new brand.

The Santana replacement is based around a low cost front-wheel drive platform structure similar to that found beneath the recently introduced Skoda Rapid and Seat Toledo.

Adding to speculation that the Volkswagen Group is close to announcing plans for a new low cost brand are comments by the company’s union boss, Bernd Osterloh. In an interview with Germany’s Handelsblatt newspaper earlier this month, Osterloh indicated his support for such a move. “We need a cheap model positioned underneath the Up for third-world countries.”