A report today indicates that Volkswagen is considering a tie-up with Chinese car maker Great Wall in order to produce a budget car.
Manager Magazin believes that Volkswagen is looking for ways to produce a budget car primarily aimed at the Chinese market. One scenario involves Volkswagen co-operating with Great Wall on just such a project, with the German conglomerate possibly taking a financial stake in Great Wall.
The German financial publication understands that Volkswagen's Chief Sales Officer, Christian Klingler, has held talks with Great Wall CEO and co-owner Wei Jianjun about a collaboration and potential partnership. It's not clear, yet, how far along discussions are.
According to the Manager Magazin, Volkswagen has tried several times to get a budget car project off the ground, all without success.
Most famously Volkswagen purchased almost 20 per cent of Suzuki back in 2009, with the two companies looking to working together on emerging market vehicles, as well as hybrid and electric drivetrains.
The partners then fell out spectacularly with Suzuki accusing Volkswagen of not sharing its technology as promised, and Volkswagen taking issue with Suzuki's use of Fiat diesel engines in its SX4 crossover. Suzuki then took Volkswagen to the International Court of Arbitration, seeking to have the German company's stake in the Japanese company returned.
For much of its life Great Wall has concentrated largely on utes and SUVs. It wasn't until around 2010 that the company began producing passenger vehicles.
Volkswagen currently has two Chinese joint venture partners with which it produces cars wearing Volkswagen badges: FAW and Shanghai-based SAIC, which also owns and operates the MG and Maxus brands.
The cheapest models sold by Volkswagen in China are the Polo, which starts at 75,900 yuan ($15,900), and the Santana (middle) that kicks off at 84,900 yuan ($17,800). Low cost models from South American, such as the Gol (above), which begins at around 30,000 Brazilian reals, are not made or sold in China.