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Is a Volkswagen sub-brand necessary?

VW already sells old new cars in China, South Africa and other emerging markets without the need for a special name.

By Clifford Atiyeh Feb 20, 2013 1:25PM
After living in South Africa for eight weeks, I've gotten familiar with the local culture and economy. I've been startled to see cheapened, stripped-down models of cars sold elsewhere, but after seeing the price tags on new cars -- would you believe a Jeep Wrangler costs $40,000 base? -- they make perfect sense.

While Americans are spoiled with cars for every family member, poorer countries don't enjoy that luxury. Developing economies like South Africa require cheaper new cars because the middle class isn't broad enough to afford the normal range of cars in the U.S. and Europe. So South Africans get cars like the Chevrolet Sonic, but with four airbags instead of 10. They get cars without stability control and bargain-basement models from China, India and Malaysia.

Volkswagen is reportedly working on a sub-brand to promote cars that are even cheaper than those on sale in South Africa, and they'll be based on older cars. That way, there's little required investment and no risk to quality reputations. With Nissan launching its Datsun brand in India, Indonesia and Russia, it could make sense for VW to follow suit.

In South Africa, Volkswagen makes a locally built model called the Polo Vivo which is built on the older Polo and includes older engines and sub-par equipment. VW also built the first-generation Golf, known as the Citi, exclusively for South Africa until 2009. It's still an incredibly popular car.

In Mexico, VW built the original 1955 Beetle until 2003. Taxi drivers won't give them up.

VW's plan calls for a new brand -- of which nobody knows the name -- to start in China with its joint-venture partners. China Car Times reports the company will base its "new" sub-brand on the super-old-school second-generation Jetta, new from 1984-1992, that's still on sale in China (pictured above). It'll be a steal at the U.S. equivalent of $9,600 to $13,000.

But with Volkswagen's success selling all these retro models, does it really need a separate brand to house them? I'm not so sure. Volkswagen has been trading affordable cars for decades under its own familiar, trusted name, even as newcomers such as Chery and Great Wall Motors have entered these markets. Whatever Volkswagen decides to do, these new cars will be old. But they'll also be sturdy and soaked in pure profit, not unlike the immortal Mercedes G-Wagen.

[Source: Reuters, China Car Times, SACarFan]
13Comments
Feb 21, 2013 1:08PM
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get rid of traction control, abs, and front wheel drive, and 5 or more airbags, keep seatbelts, and 2-4 airbags, and make road tests across the country slightly more demanding.  The two actions would offset each other in safety goals, and us Americans would not have to finance a depreciating dog for 5 to 6 years.

Feb 20, 2013 7:00PM
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I'd like to see some new old cars for sale again in America.  Not re-creations of classics but the actual classics....like they were when originally released from the factory. Priced accordingly,  I bet they would sell.....if current safety standards, EPA regulations and car collector investment portfolios were taken out of the mix.

 

Just one example:

 

Imagine being able to walk into a Chevy dealership and buying a new 1970 spec Chevelle 454 SS?

 

 

 

Feb 21, 2013 5:27AM
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doesn't VW already have "seat" and "skoda"?
Feb 23, 2013 4:16PM
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"the company will base its "new" sub-brand on the super-old-school second-generation Jetta, new from 1984-1992, that's . It'll be a steal at the U.S. equivalent of $9,600 to $13,000."

Now that's what I call a real rip-off! A 20 year old design being sold only a few thousand dollars less than it's equivalent new model? A brand new 2013 VW Jetta sells for $15,545 MSRP and contains far more standard equipment than its 1992 equivalent. Seriously, that's what they call a "steal"? A better solution would be for South African government to stop taxing foreign vehicles at 100% of MSRP, that's the real reason cars like the Jeep Wrangler sells for twice what it's actually worth in South Africa.
Feb 23, 2013 8:59PM
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It need older model in developing countries. These cars low price, spare parts available any where and cheep, quality stable. A car is just a tool instead of walking and biking. Do you now how much should pay for Buick Enclove in China for base? $80,000! Do you acceptable? You know average salary in China is 1/6 of USA. So most old models are continue been building even new model already production. Cheep is good!
Feb 21, 2013 1:05PM
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those "poor" nations are being asked to pay 40k for a base jeep?

here in the us, they are only 20, and you get more, who is calling who poor?

Feb 22, 2013 11:53PM
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I hear that VW's in the UK and Europe equipped with TDI diesel engine are getting 70-80 MPG.
Why isn't that engine sold in the USA ?
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