Volkswagen has green-lighted a new budget car aimed at first towards the Chinese market.

Volkswagen has green-lighted a new budget car aimed at first towards the Chinese market.

While recent reports have implied Volkswagen is setting up a budget brand for Europe, the German automaker hasn't confirmed these plans yet. However, they did announce a new budget model which will be sold at first in China.

VW chief Martin Winterkorn gave an interview to Der Spiegel in which he announced the car will cost between 6,000 EUR (8,000 USD or 5,145 GBP) and 7,000 EUR (9,300 USD or 6,010 GBP).

The development will not be done entirely by VW as some of the work will be carried by the company's Chinese partners. Scheduled to come out in 2015, the low-cost vehicle is VW’s answer to this segment in China where every year about three million cars are sold.

VW’s technical chief Ulrich Hackenberg told Autocar the car will not look cheap and will be more than just to meet mobility necessities. The car will be available in several body styles and could be sold under a new brand name, but it's not certain whether it is the same one aimed to be a Dacia rival in Europe.

If everything goes according to plan, this cheap model will also be introduced in India later on and possibly in other markets as well.

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