VW to Launch Budget Brand in China in 2019

Volkswagen AG plans to introduce a new entry-level brand in China in 2019, starting with a small sedan and crossover/SUV.

Plans for the on-again-off-again brand, which has been in the works for several years, have accelerated, VW development boss Frank Welsch tells Auto Express. He notes that the strategy shifted last year to an SUV-heavy lineup to reflect demand in China.

The carmaker will build the vehicles for the yet-to-be-named brand in China with longtime partner FAW Group Corp., Welsch says. Sales may spread to other emerging markets such as Brazil, India, Mexico, North Africa and Russia but are unlikely in Europe and the U.S., according to the report.

Welsch says the new economy models will keep costs down by using VW’s aging PQ architecture, which carried previous generations of the Golf, Tiguan and Audi TT, rather than its latest MQB modular platform. VW is benchmarking Great Wall’s Haval brand in terms of sales and quality, Auto Express says, and will aim for a starting price less than 70,000 yuan ($10,200).

Comparing the strategy with the one Renault SA uses for its entry-level Dacia brand, Welsh says VW’s new PQ-based models will use some MQB components as needed. The crossover/SUV also will include an all-wheel-drive option.