VW Confirms Low-Cost Car for 2015

CEO Martin Winterkorn confirms to Der Spiegel that Volkswagen AG will put an ultra-low-cost car into production in 2015.

The long-rumored models, intended initially for the Chinese market, will be co-developed with one of VW's partners there: FAW Group or SAIC Motor. Winterkorn says VW will handle basic development, including body design and engine selection.

To keep development and production costs low, much of the vehicle's parts and materials will be sourced locally. It also is likely to use existing VW technology.

The company said previously that the new car is likely to be expanded into a lineup that includes a sedan, wagon and small MPV.

Media reports say the car will carry its own brand and could eventually be sold in India and other emerging markets.