Volkswagen to Give Birth to New Low Cost Brand

German auto producer Volkswagen is looking into ways to create a new brand in China that would be responsible for developing, producing and selling affordable models, often considered more appealing to local customers. A report by Bloomberg suggests that Volkswagen has already begun talks with its Chinese partners but a decision on this topic is yet to be made.

“We see a local brand as an opportunity to get into new market segments,” Karl-Thomas Neumann, chief executive officer of Volkswagen Group China, confirmed to the aforementioned source the fact that a new brand for China is now on the table.

Does the Baojun designation ring any bells to you? General Motors has already made the step Volkswagen is looking into and, furthermore, it has also presented the first model to be launched wearing the new badge. Baojun 630 will go on sale this year and is believed to be priced at around $7000. It will be powered by a 1.5-liter four-cylinder powerplant that will generate somewhere around 105 horsepower and 135 Nm of torque. It will borrow some design cues from the Buick Excelle but, obviously, it won't adopt the equipment levels offered by GM's core brand.

As far as China is concerned, Volkswagen sees the world's largest market as the home of many of its future projects. The German group is reportedly considering building the new mini-SUV Cajun to be sold under the Porsche brand in China, alongside Audi's Q5.

Just as expected, the best market for the group 2010 was the Asia/Pacific region, with deliveries running at 2.14 million cars, of which 1.92 million were sold in China alone. Germany (1.04 million vehicles) and South America (888,000 cars) also played their part.