Volkswagen is planning a new low-cost car brand destined for emerging markets, the head of research and development at the VW car brand told German magazine Auto Motor und Sport in comments published on Wednesday.

"In India we build the Vento and a local version of the Polo that only costs around 7,000 euros ($9,300). In China we're planning a more affordably priced car in the size of a Seat Toledo," Ulrich Hackenberg said in an interview.

"There is a market segment between 5,000 and 7,000 euros, which is a real challenge," he added.

The trick is finding the right amount of content to take out of the car to make it affordable, he said. "Here you really have to closely look at what can be done away with, but those cars would not be sold under the name Volkswagen, more as their own brand."

The most basic VW Polo, the 1.2 liter Trendline petrol version offered either in white or blue, begins retailing in Germany at 12,450 euros including VAT tax.

Hackenberg said no decision had been made whether such a car, most likely a roomy sedan that could also be built in a van body style, would be manufactured with a Chinese partner.