Volkswagen exploring new budget models for China: exec
By Norihiko Shirouzu
SHANGHAI (Reuters) - Volkswagen (VOWG_p.DE: Quote) is exploring the possibility of developing budget sports utility vehicles (SUVs) and multi-purpose vehicles (MPVs) in China in a bid to keep up with shifts in the market, its China chief executive, Jochem Heizmann, said on Sunday.
Heizmann told reporters that the firm's struggle to keep up with the pace of growth in China's passenger car market in the first quarter was in part caused by its lack of budget-priced SUVs and MPVs.
"The biggest increase in volume was in budget SUV and MPV segments, where we are not in," he said.
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).
Nomura forecasts around 5.2 million SUVs to hit the China market this year, up 27 percent compared to last year. Sedans, by contrast, are expected to rise just 1 percent to 12.5 million.
Speaking ahead of the Shanghai Auto Show starting on Monday, Heizmann said the Volkswagen Group has "concrete projects" to address the issue. "We are working hard," he added.
"We are talking about a product family there. We are not taking about one or two cars," he said.
Volkswagen said the specific new projects were currently at an exploratory stage and had not yet been confirmed. Continued...