VW eyes budget car cooperation with Great Wall: Manager Magazin
Reuters
Published Apr 22, 2015 11:49AM ET
VW eyes budget car cooperation with Great Wall: Manager Magazin
BERLIN (Reuters) - German carmaker Volkswagen (DE:VOWG_p) is considering cooperating with China's Great Wall (SS:601633) on a new budget model, Germany's Manager Magazin reported on Wednesday, citing company sources.
Volkswagen's China chief Jochem Heizmann had said on Sunday the company was considering developing budget sport-utility vehicles (SUVs) and multi-purpose vehicles (MPVs) in China to keep up with shifts in the market.
Manager Magazin said one option that had been discussed in talks with Great Wall was Volkswagen taking a stake in the Chinese carmaker.
Volkswagen declined to comment on the report. A spokeswoman for Great Wall said the company was not aware of the issue.
Volkswagen, Europe's biggest carmaker, has struggled to develop a budget car for emerging markets, a key part of its drive to become the world's biggest automaker, because it found it difficult to keep costs for the vehicle low enough.
"VW has a proven inability to engineer and build low-cost cars," Singapore-based Bernstein analyst Max Warburton said in a report published on Wednesday. "VW doesn't know how to do cheap and cheerful, a company like Great Wall does."
Retail sales of SUVs in China soared more than a third last year to 3.82 million, and have more than doubled since 2012, rapidly outpacing growth in other segments, according to the China Passenger Car Association (CPCA).
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Written By: Reuters
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