Volkswagen is talking with Chinese partners about developing a local brand as rivals – such as Honda’s and General Motors’ local JVs – prepare to begin sales of new nameplates specially created for the world’s largest vehicle market.
“We see a local brand as an opportunity to get into new market segments,” Karl-Thomas Neumann, chief executive officer of Volkswagen Group China, said in an e-mailed statement sent to Bloomberg News on Thursday (20 January). The carmaker declined to give further details on the partner or the segment.
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The report suggested VW may follow GM, Honda and Nissan Motor in introducing a new, cheaper marque in China as they seek to win market share from Chinese rivals. Foreign manufacturers are introducing smaller and cheaper models and targeting inland cities, such as those in Henan and Sichuan provinces, where per capita car ownership is low and incomes are rising, according to analysts from Macquarie Group, Nomura Holdings and Booz & Co.
China’s government is promoting local nameplates and all foreign carmakers’ joint ventures in China have been asked to develop local brands, Neumann said in the statement. Volkswagen’s partners in China include SAIC Motor (also a GM partner) and China FAW Group.
VW’s new brand will make smaller cars that will cost less than EUR8,000 (US$10,750), German daily Handelsblatt said earlier today in an e-mailed excerpt of an article that will appear in upcoming edition, Bloomberg noted.
Nissan and Chinese partner Dongfeng Motor plan to introduce a new passenger car brand called Venucia from early 2012 to meet demand for cheaper models, the automaker said in September.
GM, the largest foreign automaker on the mainland, will start sales of the first car to be made by its SAIC-GM-Wuling Automotive joint venture this year, it said earlier.
The four-door Baojun 630 compact sedan will be part of a new brand of affordable vehicles and will cater to “first time buyers in the nation’s second and third-tier markets,” the company said.
Honda and partner Guangzhou Automobile expect to start sales of the Li Nian (Everus) S1 sedan in the first half of 2011, the first car made under its new brand.
The 1.3- and 1.5-litre petrol powered S1 is based on Honda’s City small car and will target entry-level car buyers, Honda said.
PSA Peugeot Citroen is also planning a new local brand with local partner China Changan Automobile Group, Bloomberg said. The automaker, which sells Peugeot and Citroen cars in China, is considering a second Chinese brand with other partner Dongfeng Motor, the company said last month.
