According to reports, Volkswagen has signed off the concept and design of its new budget city car. Media reports quoted project manager Hans Demant as saying: "The concept and design are now in place. We will produce all components in China."
Approval for the new brand has already been passed by VW's higher management, with its first appearance scheduled for 2016. The marque's first model is expected to be built and sold almost exclusively in China. However, if the model proves successful, VW could expand its markets to include India, Latin America, Eastern Europe, the Baltic region and Africa.
The project had previously hit cost problems, reportedly because of the trouble involved in engineering a budget car that could still match VW's high internal quality standards.
VW's launch of a low-cost brand would put it into direct competition with the likes of Dacia, as well as allowing the group to push into lucrative markets like China. The new brand would be VW Group's 13th marque, and will aid the group to reach a set target to become the world's biggest car maker by 2018, surpassing Toyota.