Skoda Will Continue Quest for Emerging-Market Car

Volkswagen AG’s Skoda brand says it will continue to develop a low-cost entry-level car after Tata Motors Ltd. backed out of an alliance to do just that.

The companies announced in mid-August that they were abandoning alliance talks that began in March, citing an inability to achieve desired cost savings. A source told Reuters at the time that Skoda concluded Tata’s “AMP” platform would require costly modifications to meet future crash and emission system standards.

Skoda strategy chief Thomas Sedran says Skoda aims to put its own budget-priced car into production by 2020. He says the vehicle will ride on VW’s own modular transverse matrix (MQB) chassis, which carries such models as the Audi A3 sedan, SEAT Alteca crossover and VW Golf hatchback.

VW said in February it also is developing an entry-level lineup—this one for the Chinese market—that will employ the company’s previous generation “PQ” platform. The unnamed brand will include a small sedan and compact SUV. Both models will be produced by VW’s joint venture with FAW Group Corp.