Volkswagen sub-brand confirmed

• Full coverage: 2015 Frankfurt motor show.

Volkswagen has dropped the strongest hints yet that rumours of a new sub-brand priced below its VW-badged product is on the cards.

But don't expect to see the products of that sub-brand coming to Australia.

Speaking at the Frankfurt Motor Show, Dr Heinz-Jacob Neusser, VW board member for development confirmed that Volkswagen was indeed considering a sub-brand, predominantly for the burgeoning Chinese market.

"More than 60 per cent of car buyers in China are first time buyers. Many are coming from rural areas and moving into urban areas for the first time," Dr Neusser said.  

"The world is changing."

Dr Neusser said the Chinese market had very specific motoring demands in terms of the space and performance offered and that those different priorities needed to be addressed.

And that was why a stand-alone sub-brand was being considered as well as a means of cementing VW Group's place in that marketplace.

"In this segment, sales are increasing and that's an important thing for us to support our Chinese business.

"But keep in mind, to be able to compete in this field we need special knowledge about things and special suppliers.

"The biggest market is China, but there are some other countries where people have similar demands.

"Australia – from its market size – is not a priority (for a sub-brand). But we have some other interesting things that we can do for Australia."

Dr Neusser would not be drawn on what those things were, nor on a time-frame for the establishment of the sub-brand.

"You will hear from us when we make the decision. To tell you a fixed date is difficult.

"But, yes, we are working on it."