Volkswagen is preparing a cooperation with TATA

Volkswagen seems to be preparing a sub-brand, that builds more affordable cars targeting China, India and other developing markets, following the successful example of Renault with Dacia.

While everything was going according to the company’s plan, last year the Dieselgate scandal happened and the company decided to revise its plans to abolish some models while there was no information on what they would do with the new company.

According to rumors, Volkswagen will cooperate with Tata to get information about the economical car that they are preparing, as the experience of the Indian company to reduce costs, will be invaluable for this. Tata became known for the Nano, the cheapest car in the world which costs under $3,000.

The two companies are negotiating to see how to approach the issue, but it remains unclear at present whether VW will develop the models with the help of Tata or if the Indian company will be responsible for its construction.

The cars will be based on older platforms of VW, will be using older engines and they may be offered without air conditioning.

The former CEO of VW, Martin Winterkorn has hinted that the first models of the new company will be a compact sedan, an estate and a family van, with the cheapest starting from $6500.