Volkswagen has locked in the concept and design of a low-price car to be sold under an all-new brand, VW executive Hans Demant told Reuters at the China motor show in Beijing. The new vehicle is designed to retail for roughly $7,000.

“The concept and design are now in place. We will produce all components in China,” Demant said.

Volkswagen US:VLKAY has had problems meeting internal cost targets for the project, reportedly due to difficulties creating a budget car that would still meet Volkswagen’s internal quality standards. The yet-unnamed brand’s car is set to emerge in 2016, and it will be built and sold almost exclusively in the Chinese market — though the car could be offered in other markets as well if successful there.

We remember a time (doesn’t seem that long ago) when Volkswagen was thought of a budget brand and positioned its cars accordingly. Then SEAT became the Volkswagen group’s budget brand in Europe, after which Škoda, which is also present in the Chinese domestic market, took on that mantle globally. Škoda arguably remains the group’s budget offering today, despite creeping up the ladder and offering cars that not only look like Volkswagens and compete with Volkswagens, but also receive higher marks for customer satisfaction than other VW Group brands in a number of markets.

The decision to create a budget brand was likely prompted by the runaway success of Renault’s Dacia brand, which like Škoda was transformed overnight from a European also-ran into a global wonder, as well as the relaunch of Datsun by Nissan. Forced to do battle with strictly regional auto makers in a number of markets, Volkswagen has often found itself in the unenviable position of fielding cars that are several generations out of date like the Santana (pictured above) in China, or desperately decontented versions of its modern cars that are still too expensive to do real damage to their competitors at the dealer lots.

One of the few things left undecided is the name for this new brand. Would it be too much to ask to bring back NSU or even DKW? It could be die kleine wunder that China needs, and both dormant brands already have some global recognition.