Volkswagen Group planning to introduce a budget car brand in India

Friday 18 January 2013, 11:10 AM by

Volkswagen Group is planning to introduce a worldwide budget auto brand, owing to the increased demand for affordable cars in the auto markets of India, China and Russia. Reportedly, the new brand from VW will compete with the likes of country’s largest passenger car maker, Maruti Suzuki India Limited. However in China, it will deliver a direct face off to Geely and Lada in Russia.

Volkswagen Group planning to introduce a budget car brand in India | CarTrade.com
Maruti Suzuki Ertiga

The new brand is expected to offer an entry-level sedan, mid-size sedan and a utility vehicle. According to sources, the entry-level sedan will be priced around Rs. 5 lakhs, whereas the mid-size sedan will be offered with a price tag of close to Rs 5.3 lakhs. The proposed utility vehicle is expected to compete with Maruti Ertiga and Mahindra Xylo, and will be sold for around Rs. 5.5 lakhs. According to sources, all these models will be designed on the PQ model and their production will be carried in those countries wherein the labour cost is very low.

Industry experts believe that the new brand of Volkswagen will exclusively target the auto markets of India, China and Russia, wherein the buyers have a penchant for Rs. 5 lakhs to Rs. 9 lakhs car segment. As per industry data, the cars in this segment account for almost 48 per cent of the total sales. These figures in China and Russia stood at 33 per cent and 48 per cent, respectively. It is believed that the introduction of a new car brand by Volkswagen in this segment will surely help it to increased the company’s sales and achieve its goal of becoming the world’s largest car maker by the end of 2020. It must be noted that the Volkswagen is currently at 3rd position, following Toyota Motor Corporation and General Motors, across the globe.

Reportedly, the new models will not be marketed under the moniker of Volkswagen and rather will be sold under a new name, which has not been revealed by the auto maker yet. Auto analysts anticipate that the new brand of VW will surely bring down the build quality and quality of materials at interiors. The features and advancements are expected to be basic in the new brand, however, safety of the passengers will not be compromised. It will be a treat for the Indian audience to see a stiff overseas competitor of MSIL in the Indian auto market as none of the present auto makers have majorly affected the sales of Maruti Suzuki in India.