The new chief executive of Volkswagen AG said the automaker plans a new compact model and does not foresee any imminent job cuts. Martin Winterkorn, the former head of the Audi division, became Volkswagen’s chief executive this year and has since taken over the company’s core VW brand.

According to Winterkorn, shortly after taking office, he proposed the “design and development of a very small new model below the Fox”. Winterkorn described the compact as “an inexpensive everyday small car that looks cool and is affordable.” Said new compact will be designed to serve a diverse market around the world. Winterkorn added that, unlike DaimlerChrysler AG’s ultra-compact Smart, it would have “room for four people plus luggage.”

DaimlerChrysler AG’s Smart is a compact car that boasts a lot of advantages, such as an easy-to-park construction that allows “nose-in” parking. The idea for the Smart Fortwo was backed by Swatch, a Swiss watchmaker, hence the code “Swatchmobile”. Later the name was changed to SMART, short for Swatch Mercedes ART. The function of the car is to transport two people and little luggage.

Production of the final Smart car was expensive; the main cause is the engine technology used in addition to the distinctive cold air intake. In fact, it was more expensive than other four- and five-seater cars sold in Europe. This is the reason why the joint venture experienced heavy losses. Eventually, Swatch withdrew from the business venture.

In 2005, DaimlerChrysler decided not to buy a 50 percent stake in the NedCar plant that produces Forfour superminis. The automaker ceased development of the Formore and discontinued the Roadster. Last year, after experiencing poor sales, the company announced the cancellation of the Forfour and the redesign of the Fortwo, which will be introduced in Europe this year.

Volkswagen, a Wolfsburg-based German automaker, is in the process of enforcing its own restructuring plan that includes cutting up to 20,000 jobs, cutting production costs and implementing extended working hours at its German plants. The restructuring program was presented by Bernd Pischetsrieder, the company’s former CEO. Said introduction was made in an attempt to compete with Asian car manufacturers that have been consistently successful in the global market. This automaker resorted to this strategy in an effort to gain a larger slice of the American auto market.

According to the Sueddeutsche Zeitung, a German newspaper, Winterkorn indicated that the company did not plan further cuts beyond that. “We need the team at its current strength to carry out additional projects that we are starting now,” Winterkorn said. Among those projects, “there will definitely be a hybrid drive for cars in the compact class like the Polo and the Golf, as quickly as possible,” he added. Winterkorn, the head of VW AG, confirmed that additional production of the new compact model could prevent further job cuts.

Volkswagen, one of the largest car manufacturers in the world, has popular brands such as Audi, Bentley, Skoda, Lamborghini, SEAT and the Volkswagen brand itself, founded in 1937. Volkswagen’s compact cars use the A platform, which was originally based on in Golf. and is adjustable to front- or all-wheel drive configurations.