Volkswagen’s Next ‘Beetle’ Could Be A Cheap EV Built In India

Volkswagen became a famous global brand by building the cheap and lovable Beetle. There have been some reasonable sequels in the form of the Golf and Polo, but even those eventually became more upmarket and expensive than the Beetle ever was. The brand has never stopped trying to replace its budget world car, especially for more price-conscious markets, and now it seems like VW might have the right pieces in place.

I’m going to make today’s Morning Dump, if not hopeful, at least not so dominated by the same news that’s overwhelming everything else if you have any form of social media or television in your life. The dream of a cheap people’s car is the dream of many at Volkswagen, even if attempts to replace the Beetle haven’t always worked. Maybe this time will be different.

In America, we’ve abandoned the sedan right at the time some people are looking to buy them. That’s the argument being made at least. Building cars in general is hard, which is why money-losing Ineos is going to have to recall just about every SUV it sold in America.

Hey, would you look at that — more European nations are on board with relaxing carbon rules, but this time building and trucking-related ones. This is part of a general trend in the EU to balance competitiveness, inflation, and decarbonization.

Manhindra + Volkswagen = A True Cheap EV?

When the Volkswagen Beetle was first built, what are called “Complete Knock-Down” kits, or CKDs, were sent to factories all over the world. The Beetle was cheap and easy to produce, but it was even cheaper and easier if most of the parts could be shipped, Ikea-like, to small factories in places like Taiwan, Brazil, and India.

Most car production doesn’t work like this anymore, and India’s car market is now way more advanced and features its own mix of domestic companies like Tata and Mahindra. The most popular Indian cars come from Maruti Suzuki, which is the Indian offshoot of the Japanese automaker. If you’re in India, you can get a Maruti Suzuki Fronx, which is a little crossover-type car, for about $15,000 out the door.

The closest thing to a new Beetle (not a new New Beetle) is probably the BYD Seagull, which is an inexpensive but reasonably well-featured electric car that costs under $10,000. The main issue is that it’s built by a Chinese company and therefore isn’t exactly welcome everywhere.

Could Volkswagen compete? So far the company’s electric offerings haven’t been met with much enthusiasm. The same is true for the company’s attempts to build a cheap car for India, which most recently brought us the dinky Polo-based Ameo, which flopped and was discontinued. And, yet, it sounds like Volkswagen is trying again.

From Manager Magazin, which picked up this interesting tidbit from VW’s big annual press conference this week (translated):

All the more surprising was the reaction of CFO Arno Antlitz (54) when a journalist asked him shortly before the end of the annual press conference on Tuesday in Wolfsburg about plans outside of the core markets, for example in India: Antlitz, with practiced politeness, let his CEO Oliver Blume (56) speak; then he rattled off: “India,” that was “a very good keyword. We have been in India for a long time, and very successfully too.” But, Antlitz got to the point, “not so much in terms of volume.” So, he continued to muse, “you have to be very cost-competitive, you have to have a good cost base, you have to be localized”; and “we will only achieve that with a partner.”

The conversation continued, and Antlitz was unstoppable: “We are in very good discussions; it’s still too early to communicate anything.” But: “We don’t want to abandon the Indian market; quite the opposite.” He could also have said: Volkswagen is still very much alive in India.

The financier talked about a project that is indeed already quite advanced: Volkswagen is once again attempting to create a budget car. A car, in this case electric, for the masses. So affordable that it could even be a success in a country like India—and one that can even make money.

An affordable, competitive, money-making electric car is exactly the vehicle everyone hopes Volkswagen will build. It’s also exactly the kind of car Volkswagen has struggled to build up to this point. So why is there hope?

Two reasons. The first, and most obvious one, is that Volkswagen is likely going to partner with a local company to make production and distribution easier. In particular, Mahindra seems like a good potential match.

The second reason requires a bit more of a leap of faith. The executive behind the project appears to be Škoda CEO Klaus Zellmer. Škoda, as a brand, has found success in other markets. The brand offers great cars on Volkswagen platforms that are cheaper without usually feeling cheap. It’s also one of the few Volkswagen brands that actually grew last year. Recently, Škoda launched the locally developed Kylaq crossover in India at a cost of around $11,000. At least so far, orders for the vehicle are strong.

Could Zellmer figure out a way to make this work? I just want to point out the confidence required to post a photo like the one at the top here, which shows Škoda execs and board members walking towards the camera like they’re in some kind of really weird, business casual-oriented Marvel movie. That’s the kinda move you can only pull when you’re really feeling yourself.

Is The Death Of The Sedan A Detroit Big Three Own-Goal?

I like writer David Zipper, even if I don’t always agree with him. His provocative argument this week in Fast Company goes something like this:

• Because of President Trump’s economic policies, Americans could be in for a recession or, at the very least, more expensive car prices.
• Automakers, especially in Detroit, pursued bigger and heavier cars and this “car bloat” led them to cut all of their cheaper models.
• If the economy falters, American automakers more than anyone will take a hit.

Here’s the key bit:

Even if Trump ultimately dumps his tariff proposals—a huge “if”—growing fears of a recession, which Trump has refused to rule out, reveal the vulnerability of Detroit’s bloated lineups. Some budget-conscious car buyers may save money by delaying their purchase, choosing fewer features, or selecting a smaller model within the same vehicle class. (This may already be happening: The comparatively modest Toyota RAV4 recently dethroned the Ford F-150 pickup as the top-selling vehicle in the U.S.) The other likely scenario: They could switch from an SUV or pickup to a comparatively cheap sedan.

I think the general premise, which is that more expensive cars will be less popular in bad times, is probably true. Mitsubishi has done well making cheaper cars, for instance. On the other hand, Nissan offers more sedans than maybe anyone, and that brand has suffered in the United States. The above example, too, of the RAV4 dethroning the F-150 isn’t a great one as the RAV4 also is not a sedan.

I’d like to see more sedans because I like sedans, but a sedan isn’t necessarily a better or safer vehicle. The Chevy Trax is an affordable crossover and, with a curb weight of around 3,100 pounds, it weighs less than the last Chevy Malibu and roughly around what the smaller Chevy Cruze weighed. Ford, too, has the Bronco Sport, although it’s not quite as affordable. I also think Ford’s Skunkworks project is kind of exactly like what Zipper is asking for in this piece.

If there’s one automaker in Detroit who could do better it’s Stellantis. We need a cheap Jeep again.

Ineos Recalls 7,000 SUVs Because Of Doors That Might Randomly Open

David really liked the Ineos Grenadier when he drove it, and I don’t remember anything about the door randomly flying open. Apparently, that was a risk.

From Bloomberg via Automotive News:

Ineos Automotive is recalling more than 7,000 vehicles in the U.S. and Canada after customers reported that doors on their SUVs flew open while driving.

Ineos will replace door-button mechanisms on all Grenadier sport utility vehicles made before April 19 last year, according to reports filed with the National Highway Traffic Safety Administration.

Transport Canada posted a similar notice on its website, which says there are 452 affected vehicles in that country.

The parts were assembled without enough grease being applied, the company said, leading external buttons on some vehicles to stick and cause doors to open mid-journey. Ineos will pay for the full cost of the repairs.

Building cars is hard.

More EU Countries Wanna Slow-Roll Decarbonization Just A Bit

I wrote last year that the EU was going to have to decide if it wanted to rapidly decarbonize or if it wanted to protect its homegrown industries, and it seems, at least a little bit, that Europe is willing to take a slower approach. Most recently this involved the EU’s leaders suggesting spreading the carbon goals over three years for automakers, instead of just one.

According to Bloomberg, Estonia’s Premier is already asking for some transportation-related programs to be adjusted:

The Estonian leader’s comments highlight the multiple challenges facing the EU to stay on track in the push to make the bloc’s economy greener, while also boosting spending on defense and delivering on a pledge to cut persistently high energy prices that have badly hurt economies like Germany.

The new program, known as Emissions Trading System 2, is due to begin in 2027 as a key tool to help the EU reduce greenhouse gases by at least 55% by the end of the decade, compared with 1990 levels.

The plan has already come under criticism from Poland, which wants to delay it to 2030 amid concerns that carbon costs will further inflate energy prices. Politicians in Slovakia and the Czech Republic have also urged a delay.

ETS 2, as it is called, is basically a cap-and-trade system that covers buildings, road transport, fuels, and other industries that aren’t already covered under other programs.

What I’m Listening To While Writing TMD

While we’re talking about pop music here, I’m going to go back in time to one of the weirder pop songs of all time. It’s REM’s “Shiny Happy People” from 1991, featuring the amazing Kate Pierson from The B-52s. Allegedly, Michael Stipe wasn’t a fan of contemporary pop music and kinda took it as a dare to make a bubble gum pop song. “Shiny Happy People” might also be a reference to propaganda posters in China’s Tiananmen Square.

The Big Question

What’s the closest thing we’ve gotten to a Beetle after the original? Is it even possible to build an EV Beetle?

Top photo: Skoda