Volkswagen set to challenge Datsun with its own entry-level brand

Volkswagen has hit right on the target this time but the timing of the action has more significance here. Yesterday in Mumbai, the grand re-launch of the Datsun brand by the Japanese auto maker Nissan took place. The Datsun brand is revived as the low-cost auxiliary of Nissan that would target the emerging markets of India, Russia and Indonesia in terms of building and selling inexpensive cars. Buzz is that the German auto giant Volkswagen as well is planning to start its own low-cost brand for the emerging markets. As confirmed by the board member Ulrich Hackenberg, the Volkswagen group would be developing a new brand for small and fuel-efficient cars for the emerging auto markets of the world.

The cars under this brand from VW would be customized according to the particular emerging market and would also be produced locally in that market. The cars would cost around 5,000 euros (approx Rs. 3-4 lakh). Co-incidentally or not, the Datsun brand is following the exact same strategy for its cars. Volkswagen at present is the biggest group of auto brands in the world with distinguished brands like Bentley, Buggati, Audi, Lamborghini, Porshce, SEAT, Skoda etc. It also aspires to sit on the number one position for the auto manufacturer in the world by 2018 with over 10 million vehicles.

To achieve this aim the inception of a new entry-level brand will prove to be very beneficial in shoveling in large volumes. For rolling out its low-cost products the Volkswagen group has no intensions of using the brand name of Skoda or SEAT which are already targeting the mass market segments. The inexpensive new cars from VM group will get a brand new nametag. The new brand from VW and the Datsun brand are already sharing the news space; let’s see how well they both do when it comes to sharing the market space.'