VW turns to Brazil for help building chic, affordable small car

Automotive Industry

Source: Automotive News Europe, 2020-01-11

The push for greater regional autonomy that has helped Volkswagen win back market share in Brazil could now reap benefits in its European home market. VW's latest South American model, the Nivus, will come to Europe after senior executives were impressed by its combination of urban styling and low investment costs when they visited the company's design studio in Sao Paolo last year.

After testing the car's look during clinics with European customers, VW executives last March approved Nivus production starting in 2021. Chances are the car will also be built for Europe in Pamplona, Spain, where its siblings, the Polo and T-Cross, are made.

"I am a fan of the new Volkswagen Nivus," sales chief Juergen Stackmann tweeted last month, congratulating the Brazilian team after they released an early teaser video of the small coupe-styled crossover.

The Nivus, previewed by the New Urban Coupe concept, will go into production this year in Anchieta, Brazil. It is the first VW designed and engineered entirely in a virtual environment. Only individual parts that differed materially from the Polo were constructed for validation purposes, but no conventional, full-scale prototype was built.

Designers say customers will not notice the time and money-saving shortcuts. The car was developed using existing subassemblies from other vehicles. To give the Nivus its coupe-like look, for example, the longer rear module of the Skoda Rapid was used to stretch the vehicle.

Shorter than the South American T-Cross, the Nivus is positioned in the high-volume small segment that accounts for about 70% of Brazil's passenger car market. "It has the wheelbase of the Polo, but the tires of the T-Cross.

"We see the MQB platform as Lego blocks with so many parts that we can combine to come up with something different," said JC Pavone, the head of VW's design studio in Sao Paulo.

For years, Brazil was VW Group's third-largest market behind China and Germany, largely because of strong demand for the small, affordable VW Gol, which was a top-seller. Overall VW brand deliveries in Brazil reached 661,000 vehicles in 2012, but an aging model range caused volume to plummet to 218,200 four years later. The share halved and the brand, once the dominant local player, fell behind current market leader Chevrolet.

VW made Pablo Di Si head of its operations in Latin America, which includes Brazil, in late 2017 and is investing about €1.5bn into the country between 2016 and 2020 to rejuvenate its lineup.

"We have the autonomy from Volkswagen in Germany to develop all our own tools," Di Si told reporters last month in Anchieta. Those tools include a new digital dealer experience and the equipment needed to engineer a new model such as the Nivus nine months faster than the norm using virtual prototyping. "If we launch something and it doesn't work, we change it here locally," Di Si said.

The Nivus is the fourth MQB model launched under Di Si following the Novo Polo hatchback, Virtus compact sedan and South American T-Cross SUV.

According to VW's latest figures, its sales in Brazil have grown twice as fast as the overall market, lifting its share to 15.3% from 12.5% since 2017. Because of upheaval in Argentina, however, the South American region failed to break even in 2019, continuing a long streak of losses.

Top executives from the VW brand board returned a few weeks ago to survey the progress by the Brazil team, Di Si said. Asked whether more cars designed in Brazil might make their way to Europe at the request of headquarters, he replied: "I hope this is just the beginning. Actually, it's more than a hope."

Pavone gave a few clues about the latest model shown to the board. "It's something in this segment (small) and is in a very late stage of development already. The German board appreciated it a lot so there is a possibility that this might be taken to Europe as well," he said, hinting that the new model would feature a more progressive and modern look than the Nivus.

"We had more freedom to be a little more creative for this car, with fewer technical limitations and a little more budget," Pavone said. "When people had a look in the clinic, they said it looks like it is connected more with future VW designs than current ones."

Fortunately, Wolfsburg has an inside track into his thought process. VW brand's head of exterior design is JC's twin brother, Marco.