VW Approves Low-Cost Car Program

Volkswagen AG has finally decided to move forward on plans to develop a new budget-priced car that will be built in China.

Hans Demant, who heads the project, tells Reuter the concept and design have been approved.

In February CEO Martin Winterkorn told Der Spiegel that such a vehicle would go into production in 2015. Last month Germany's Manager Magazin said the project was likely to be approved by VW's board within weeks.

The car, which VW has been pondering for more than two years, is likely to cost between €6,000 and €8,000. The company said earlier that the low-cost vehicle is likely to be expanded into a lineup that includes a sedan, wagon and small MPV.