If given the green light, the new car would be manufactured in Malaysia and will be followed by a larger sedan for the Singaporean market. The deal with Proton would allow VW to take advantage of free trade agreements in the region and at the same time increase its presence in Asia. VW is lagging behind its main rivals, Mercedes-Benz and BMW, who already have significant manufacturing facilities in south-east Asia.
Rose also mentioned that VW would start making cars in India this year. VW is also expected to release a new budget model targeted at emerging markets, which will be positioned below its current Fox hatch. The new car should go on sale in 2009 with the most likely markets being Russia, India or China.