Volkswagen considering new budget brand

The Volkswagen Group is rumoured to be looking at launching yet another brand, this one specifically geared as a no-frills manufacturer for developing nations and parts of Europe. Essentially, Volkswagen is looking to take on budget Romanian manufacturer Dacia, which is owned by the Renault-Nissan alliance.

A report by German trade magazine Auto Bild confirms the move but the Wolfsburg-based company has so far insisted that no firm decision has been made.

According to the report, the new brand will launch in 2015 with three models priced between 6000-8000 euros ($7600-$10,000), and will find its biggest market in countries such as Russia, India, Brazil and China.

Production of the cars is likely to take place in either China or India, which means the brand may one day have a chance of an Australian entry, particularly if Renault decides to pull the trigger and introduce Dacia down under, as recently suggested.

There’s potential for Volkswagen to use the platform of the yet-to-be-revealed successor to the Chinese-made, front-wheel drive Santana as a stating point for its budget brand.

The entry-level Volkswagen Up! city car launched locally last month, giving the German brand a player in Australia's cheapest vehicle segment with a starting price of $13,990.