At last week’s Shanghai Auto Show 2011, the Volkswagen Group expanded its China portfolio with the official introduction of the Seat brand to the world’s largest car market. However, the German giant has more plans in store for China as the VW Group is considering the creation of a low cost brand to break through the country’s popular entry-level segment.
“We are currently evaluating with our partner First Auto Works whether we need to add a domestic brand to enter the low-cost portion of the Chinese market,” said Soh Weiming, executive vice president of sales and marketing for VW Group China, at the Automotive News China Conference.
Volkswagen isn’t the first foreign automaker to come up with such an idea as several global players have already formed low-cost brands targeting China’s entry-level segments including General Motors with the Baojun marque and Honda with Li Nian.
“Currently we are not competing in the 20 percent of the market made by low-cost products, but before making a decision we should also look to how this segment could evolve,” Soh said.
In 2010, the VW Group sold close to 2 million vehicles in China, recording a 37.4 percent increase over the previous year. The company recently revealed plans to invest €10.6 billion in China over the next few years to further increase sales.
Sources: VW & Autonews [Sub.Req.] , Photos: China Market VW Bora
