Volkswagen's entry-level brand has hit a snag as insiders are reporting the company is having problems balancing cost and quality.

According to Autocar, Volkswagen is "struggling" to keep costs down while maintaining the necessary levels of quality and safety. This is a difficult balancing act as high prices would hamper sales while low quality could tarnish Volkswagen's image.

Despite the problems, the entry-level brand is “still under consideration” and could eventually be launched if the company is able to iron out all the issues.

As we have previously reported, the entry-level brand was expected to be announced later this year and appeal to buyers in emerging markets such as China, Russia and India. The lineup was rumored to include a sedan, wagon and MPV with prices ranging from €7000 - €9000 ($9,670 - $12,430).

Volkswagen entry-level brand delayed due to cost issues - report