The Volkswagen Group will launch its long-anticipated budget brand in 2018, Volkswagen Group chairman Martin Winterkorn has confirmed.

Autocar UK understands that Winterkorn confirmed the news in an interview due to be published on Sunday in German newspaper Bild. In the same interview he confirmed that a successor the Bugatti Veyron would be built, and that it would be sold with a hybrid powertrain.

Initially, the VW Group budget brand will launch an SUV, saloon and hatchback. All three will be built in China and sold with starting prices ranging from 8,000-11,000 euros (Rs 6.11 lakh-Rs 8.40 lakh).

"We will introduce a budget car family in 2018 with an SUV, sedan and hatchback,” Winterkorn is understood to have told Bild.

The VW Group has long struggled to meet its internal minimum standards for manufacturing while still meeting the budget constraints imposed by building a budget car to be profitable. As a result, there has been no sound business case for building budget cars or investing in the infrastructure to launch a new brand until now. When it is launched, the brand will be the VW Group's 13th.

Although the cars will initially only be sold in China, other potential markets include India, Latin America, Eastern Europe, the Baltic region and Africa. There are no plans to sell the car in Europe at present.