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Volkswagen building budget car family planned for China in 2018

Volkswagen has publicly pondered a low-cost car for China, something akin to Nissan's Datsun revival in Southeast Asia, for at least three years. In 2013 it tapped Chinese partner FAW to help develop an entire budget brand, with plans to have something on the market in 2016 in the 6,000- to 8,000-euro range. About a year ago, VW said it couldn't figure out how to engineer an inexpensive car that didn't run counter to the brand's values, then three weeks later said it had overcome the issues. Reuters now reports that VW CEO Martin Winterkorn told German newspaper Bild am Sonntag, "We will bring a budget-car family to market in 2018, with an SUV, saloon and hatchback." Winterkorn didn't offer any other details like who VW would work with to build it - VW has partnerships with both FAW and SAIC, but the announcement will be welcomed by the brand's Chinese outpost. When this adventure started, VW said it was working to create a model that would cost 6,000 to 8,000 euro. That estimate has increased. Winterkorn is now saying the 2018 offerings will come in between 8,000 and 11,000 euro. In a straight euro-to-yuan conversion, that would equate to Chinese pricing of 56,000 to 77,000 yuan. For comparison, the New Polo with a 1.4-liter engine and a manual transmission starts at 85,900 yuan. Perhaps with an eye on the success of the Nissan-Renault sub-brand Dacia in Europe and emerging markets, Winterkorn told Bild, "We will see if this is something of interest for other markets as well." On the opposite end of the price/performance spectrum, Winterkorn also said that VW is working on two new models for Bugatti, one powered by a traditional gasoline engine and another with some sort of hybrid setup. The latter model would reportedly be the higher-performing of the two, though it's not clear whether there would be two vehicle lines or two versions of the same vehicle. As ever, as soon as we know more, so will you.

VW's Winterkorn tells 20,000 staffers of big cost-cutting plans

During a gathering of 20,000 Volkswagen Group employees at company headquarters in Wolfsburg, Germany on Wednesday, CEO Martin Winterkorn dropped a bombshell. The boss stated that the automaker isn't operating efficiently enough and admitted the company needs to radically start cutting back to raise its profit margins. To right the ship, Winterkorn has proposed killing off less profitable models and spending less on research and development.
According to Reuters, Winterkorn wants to raise the VW brand's profit margin from about 2.9 percent in 2013 to a target of 6 percent. To make that possible, his plan amounts to increasing cost cutting until Volkswagen reaches about 5 billion euros ($6.7 billion) per year to get things back in order. "Over the short-term, we urgently need more efficiency and higher profit," the CEO said during his speech, according to Reuters.
However, Winterkorn can't make these decisions unilaterally. Volkswagen's works council also has a seat on the supervisory board to represent laborers, and it isn't likely to take the proposed cuts sitting down.

Volkswagen rolls out all-new Polo R WRC

Volkswagen may have ruled out producing a road-going Polo more potent than the new GTI, but on the rally stage, the Polo R WRC has proven absolutely dominant. Introduced to the World Rally Championship in 2013, the Polo R won ten out of the baker's dozen rallies in its debut season, and all but one last year to win both titles two years running. That's quite an act to follow, and the task falls to the machine you see here. The new second-generation Polo R WRC was just revealed at Autostadt in Wolfsburg. The rally machine has been substantially reworked for 2015, with a new livery, new bodywork and new oily bits. In fact, Volkswagen says it has revised three quarters of the components, and while it has not yet detailed the "many new ideas [implemented] under the bonnet," it has identified the hydraulic gearbox as "the biggest innovation." Further details are still to come, but this is our first look at the new machine with which Sebastien Ogier, Jari-Matti Latvala and Andreas Mikkelsen – who finished last year's championship in first, second and third, respectively – will tackle this year's championship, starting with the Rally Monte Carlo on January 22-25. FIA World Rally Championship (WRC) New technology, new design: presenting the second generation Polo R WRC - World premiere of the 318-hp Polo R WRC in Wolfsburg - Member of the Board, Dr. Heinz-Jakob Neusser, launches title defence - WRC kicks off with the iconic Rally Monte Carlo from 22–25 January Wolfsburg (15 January 2015). In top form, both technically and visually: Volkswagen presented the second generation of the Polo R WRC in Autostadt, Wolfsburg. The works team from Wolfsburg has its sights set firmly on another successful defence of its titles in the FIA World Rally Championship (WRC) with a new car and a new look. Volkswagen completed a clean sweep of all the World Championship titles when the Polo R WRC made its debut in 2013, before repeating this impressive feat last season. Continuity is the key to the driving line-up for 2015: double world champions Sebastien Ogier/Julien Ingrassia (F/F) and team-mates Jari-Matti Latvala/Miikka Anttila (FIN/FIN) and Andreas Mikkelsen/Ola Floene (N/N) will roll down the starting ramp and head onto the first special stage of the year for Volkswagen at the legendary Rally Monte Carlo on 22 January. "The new Polo R WRC has undergone intense further development, both on the inside and the outside," said Dr.