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Venucia R30 launch kicks off battle of the budget car

Nissan has beat Volkswagen to the punch in launching a budget car exclusively for the Chinese market.

With a starting price of only ¥39,900 ($6,435), the Venucia R30 launched by Dongfeng-Nissan on July 16 is the first-ever car model under ¥40,000 offered by a major joint venture.

The R30 is the fourth model from the Venucia JV independent brand, which has sold more than 200,000 vehicles since the brand was launched in April 2012.

Dongfeng-Nissan has positioned the R30 as an affordable, entry-level model equipped with best-in-class features to appeal to first-time car buyers. A marketing executive boasts that the R30 is to become the first choice for new buyers because it offers more room, better quality, lower fuel consumption and superior service.

The R30 comes well ahead of rival Volkswagen’s budget car for the Chinese market priced at €6,000-€7,000, a plan that was announced in March 2013. 

Details of the budget car will be announced later this year, according to media reports quoting an executive from FAW-Volkswagen. The budget car most likely will be marketed and distributed as a JV independent brand like the Venucia, according to the executive.

The timing of the Venucia R30 launch is interesting because the A0-class or subcompact segment has been losing market share while SUVs and MPVs continue to steal market share from other segments. Dongfeng-Nissan also chose to launch the R30 budget car prior to the launch of its first SUV model later this year. 

The move seems to be largely strategic. It gives Dongfeng-Nissan a head start over Volkswagen for almost a year. With the Venucia R30, Nissan is also competing with Chinese independent brands as well as JV models such as the Chevrolet Sail and Hyundai Verna which are moving into the subcompact segment.

Analysts believe that the R30 is trying to repeat the success of the Sail, which pioneered into China’s family car below “¥100,000” in 2000. The Sail, which dropped the price into below the ¥60,000 range a decade later, remains as one of the top selling passenger car models today.

It is still early to predict the success of the R30 and it remains to be seen if Chinese consumers will accept the R30, a rebadged Nissan March that was unsuccessful. But the battle of the budget car among multinational carmakers and their JVs is on and we may see other rivals join the fray.

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