Emerging markets like India, Indonesia and Russia, will be the next big volume buyers of cars in the years to come. Volkswagen is once again putting on its 'peoples car' hat; after all, the brand name is a direct translation. VW Spokesman Eric Felber revealed to German publication Der Spiegel that the company has been considering an inexpensive car brand for some time, but clarified that nothing is final yet.
Earlier this year, Nissan announced plans to resurrect the Datsun brand for emerging markets with a plan to invest $400M to double its Southeast Asian production capacity. The Renault-Nissan Group already has the Romania-based Dacia brand catering to emerging markets in Central and Eastern Europe as well as Russia.
Volkswagen's earlier attempt at small cars through a partnership with Suzuki back in 2009 has resulted in numerous accusations and counter-accusations from both sides as well as a legal debacle between the two automakers. The estimated price for vehicles from the new affordable brand should be around €6000 to €8000 for it to be competitive.
The timing is perfect for affordable cars, but one major consideration for VW is if it would keep the VW badge or rebrand it as something else. VW is now known as a more refined brand compared to its 'peoples car' beginnings with the Beetle. Also in consideration would be production facilities, platforms to use, vehicle engine options, features and amenities as well.
We view the recent moves by major auto manufacturers as a reaction to the imminent threat posed by Chinese carmakers who sell cheap cars with albeit dated technology to emerging markets with a possibility to develop themselves as formidable competitors in the years to come.
source: Der Spiegel