Volkwagen is believed to be working on a budget brand and will make an official annoucment in this regard next year. The German automaker's head of development, Heniz Jakob Neusser in an interview with autocar said that the comp[any was currently working on the cost part of the project and that they would put the pan into action if it met all their criteria and standards.
He also said that the brand will be sold separately but will obvioulsy be recognised as a vehicle from the VW group. It is believed that the German automaker has set in its sights, Romanian automaker Dacia who themselves are a budget brand for their parent company Renault.
However, what we believe is that Volkswagen is also aiming to target developing markets with cars that will be produced under this brand name and will also aim to target companies like Nissan and Suzuki all of whom make budget brands for various markets. It is also possible that once this brand is launched, it spawn budget models for VW's other subsidiarys like Skoda and Seat.
Source: AutocarUK