Volkswagen is planning a second low cost car, according to a report in a German consumer car magazine.

VW chief Martin Winterkorn is considering developing two models with a target price of less than EUR10,000, one of which is a sedan with a base price of EUR7,000, reported Strassenverkehr.

According to just-auto’s Brazilian correspondent Fernando Calmon, Volkswagen has restarted work on a low-cost car for emerging markets in Brazil. To compete with other low cost cars such as Fiat’s planned Uno replacement for the region, that would have to be built at the EUR7,000 price level.

Such a car would also be suitable for the Indian market. Volkswagen had planned to build the Passat, Jetta and a special low-cost version of the Polo, but is now reviewing which models may be built in India while Winterkorn has suggested there might be a special small car for emerging markets, also built in India.

The other sub-EUR10,000 car is likely to be the Fox replacement, built in Brazil but also sold in western Europe, as is the case with the current model.

Sales of that model outside Brazil have not lived up to expectations as the high value of the Brazilian real has resulted in higher pricing for what is essentially an ‘economy car’ than first planned.