VW's Chinese budget brand still on track for 2018 launch

Volkswagen has confirmed its China-only budget brand with partner FAW is going ahead, with two SUVs in the pipeline.

Speaking at the VW Group’s annual results press conference, VW;s board member for China, Jochem Heizmann, said: “In China we are working full steam on the budget car with our joint venture with FAW-Volkswagen. We plan for it to be an independent brand there.”

Details on the budget venture are sparse, but Heizmann confirmed that the first two cars introduced under the as yet unnamed brand will both be SUVs.

It’s likely that one of these will be a mid-size SUV, given the current market demand in this segment, and that saloon and hatchback models which will follow – platform-sharing is inevitable, as Volkswagen seeks to minimise development costs of the budget range.

It is not yet known which segment the second SUV will occupy.

The brand will be the VW Group’s 13th, and contradicts industry speculation that Volkswagen will sell off some of its subsidiaries in the light of mounting financial sanctions stemming from the ongoing emissions scandal.

“To my mind I’ve expressed 13 brands is not a weakness but a strength. At these times, we are currently not looking into any such considerations,” said VW CEO Matthias Müller.

Despite earlier reports that the brand will go on sale in additional markets outside China, including India, South America and Africa, Müller confirmed that the budget brand will only be sold in China.

VW’s partner in the venture, FAW, is a state-owned manufacturer, which produces commercial and mass-market vehicles; it also has joint ventures with General Motors and Toyota in China.