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We Hear: Volkswagen Budget Car Clears Cost Hurdle

Motor Trend logo Motor Trend 3/27/2014 Erick Ayapana

Volkswagen’s long-rumored budget car has reportedly taken a significant step forward in the planning process. After spending over a year attempting to hit cost requirements for the new car, Volkswagen executives are finally ready to approve the project, though the budget car will still face a few more hurdles before going into production.

According to Reuters, the VW budget car could sell for as low as 6000 euros ($8300 U.S. dollars) and would help the automaker gain significant ground in emerging markets like China, India, and Brazil. The Volkswagen up! is currently the carmaker’s cheapest offering, though its starting price is around $13,000.

Volkswagen Up! variants for Geneva© Provided by MotorTrend Volkswagen Up! variants for Geneva The company’s executive board is expected to approve the project in the coming weeks, though the budget car will still need approval from the supervisory board, which could sign off on it as early as this summer.

One of the struggles Volkswagen faced in planning the budget car was ensuring that internal quality standards could be met. VW reportedly benchmarked Suzuki, which has successfully launched low-cost cars in India. Nissan also stepped into the budget-car game by resurrecting the Datsun name to launch a line of affordable cars in emerging markets. It recently unveiled the Datsun Go, a four-door hatchback powered by a 1.2-liter three-cylinder, which is priced at the equivalent of $6700. MotorTrend Image© Provided by MotorTrend MotorTrend Image

Volkswagen could potentially follow Nissan’s lead and launch a new brand dedicated to an expanding portfolio of budget vehicles. Volkswagen’s Seat and Skoda brands, long considered the company’s lower-priced offerings, have recently been moving upscale. Czech-based Skoda, for example, showed up at this year’s Geneva show with the VisionC concept, a stylish sedan that could hold its own against the upscale Audi A7.

Source: Reuters

Volkswagen Polo at 2014 Geneva Motor Show© Provided by MotorTrend Volkswagen Polo at 2014 Geneva Motor Show

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