Volkswagen is converting its Up city vehicle into a range of entry-level cars to reach its goal of 10 million vehicle sales annually by 2018 and to grab a portion of the market from Fiat. The German vehicle manufacturer has been unsuccessful in finding the one real successor to the original Beetle, thus, it is testing several models to embark on the market for basic, affordable transportation.
Prior to the Up urban vehicle, attempts on the VW Fox and Lupo have failed. Volkswagen's Seat and Skoda brands are selling Up clones. Also, a cut-rate variant will be aimed for first-time purchasers in China, India and Brazil. Analyst Albrecht Denninghoff at Frankfurt-based Silvia Quandt Research commented that the Up is a "fundamental milestone" for VW to hit its sales goal.
The expanded range of this city vehicle will "really increase the pressure" on the rivals in the segment in which they generate their finance. Sales of the subcompact are increasing as governments urge carmakers to manufacture vehicles that consume less fuel and purchasers seek vehicles ideal for driving in urban centers. Minicar sales such as Fiat Panda and Up could increase 25% worldwide to 11.2 million units by 2015, IHS Automotive revealed.
After shifting upscale with vehicle models like the 16,950-euro new Beetle and the 68,300-euro ($89,400) Phaeton sedan, the return to basic vehicles indicates a key test for Chief Executive Officer Martin Winterkorn, who arranged the development of the Up after he took charge in 2007 to help the automaker become the largest vehicle manufacturer in the world.
VW became a worldwide automotive power with the support of the Beetle, which is the original "people's car." After more than 60 years, the original unit (which became synonymous with cheap, basic transportation) went out of production in 2003. Volkswagen has been unsuccessful in gaining traction in this segment, with the 9,850-euro ($12,860) Up making its third attempt to manufacture an internationally successful subcompact.