VW Ponders Low-Cost Car Line for China

Volkswagen AG tells Reuters it will decide this year whether to create a new family of ultra-low-cost cars in China.

The company has been publicly signaling interest developing a new line of vehicles for emerging markets with models selling in a range of $6,700 to $9,300. The vehicles would compete with cars from such low-cost brands as Datsun (Nissan) and Dacia (Renault).

R&D chief Ulrich Hackenberg tells Reuters that VW has not decided whether to sell the cars under its own brand or create a new one. In either case, the company said earlier that it would aim to introduce the new lineup likely to include a sedan, wagon and small MPV before 2016.

VW has decided that, if it moves forward, the new vehicles will be co-developed with one of its Chinese joint-venture partners, FAW Group or SAIC Motor. Reuters says VW would probably keep costs low by using components from its previous-generation models.