VW budget brand to launch in 2016

Volkswagen's new budget brand will be approved by the company's board this summer, according to reports in the German media.

The project has long proved difficult for VW, as it has struggled to meet its internal minimum standards for manufacturing while still meeting the budget constraints. As a result, there has been no sound business case for building the car or investing in the infrastructure to launch a new brand, which would be the VW Group's 13th.

However, the project is now reported to have reached a point where it can be submitted for board approval. Once received, the car would be ready for production by late 2016 or early 2017, according to the reports.

The first car to be launched is expected to cost around £5000 (Rs 5 lakh) and be built and chiefly sold in China.

Other potential markets include India, Latin America, Eastern Europe, the Baltic region and Africa.