Tata to Make Budget Cars for Volkswagen

Volkswagen AMEO INDIA
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Tata to make budget cars for Volkswagen and the global markets based project is reportedly codenamed as Economy Car

A report emerged on Manager Magazine’s July 22 issue stated that world’s leading automaker Volkswagen will be recommencing its budget car project as showed at the brand’s stock market chart. The German auto giant had been negotiating with Indian car manufacturer Tata Motors for kick start the new project which would give VW a competitive edge over its rivals in the affordable car space globally.

Tata Motors should be developing the global ‘budget car’ completely from its own expertise or partially for Volkswagen according to the report. It is believed that Volkswagen has been developing the assignment on its own internally but the move to seek Tata Motors’ assistance would have come to grab market share in the volume churning entry-level segments in countries like India and China.

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The reinstating of the project has been codenamed as Economy Car. The main trick in the box for a budget car is bringing the development costs under control and positioning it effectively in the market. Volkswagen designers and developers could not achieve the targets set which led to repeated hindrances in the project.

The car will be sold as the cheapest model in the Volkswagen lineup and the man responsible for the development of the project is none other than the company’s CEO Herbert Diess reportedly. The corporate strategy and contract stipulations with Tata will be dealt by Thomas Sedran, Head of VW Group Strategy. The Economy Car project could spawn three models a compact sedan, a MPV and an estate.

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Volkswagen might put its old platforms into test across its group brands with this project and the idea of budget car will have huge appeal, as unlike many automakers, the brand is considered by potential customers as a premium outfit. Tata Motors is giving its best to expand presence in global markets and the cheaper models will only aid the cause.

Tata gained global recognition with the launch of the cheapest car in the world, Nano, and could use Volkswagen’s expertise to strengthen its portfolio. Following the JLR buyout, Tata is slowly feeding in the British brand’s technologies into its upcoming vehicles. The mooted Economy Car project could play a game-changing role for the Indian company’s future.
Source: Manager Magazine