PARIS SHOW: VW for Hyundai money

2010 PARIS MOTOR SHOW NEWS SPECIAL

If local small-car sales champions felt threatened when Volkswagen unveiled a Polo hatch at $16,990 earlier this year, they may be in for another surprise. The German car maker is planning to introduce a car that is even cheaper than the Polo and at a price that will likely undercut some Korean cars.

The Volkswagen Up! is a small four-seater city car that's smaller than a Polo but bigger than a Smart – and it is on the cards for sale in Australia.

The Up! goes on sale in Europe from late next year and could be in Australian showrooms in early 2012, says Volkswagen board member Dr Ulrich Hackenberg, who addressed Australian media at a briefing prior to the Paris motor show this week.

"It will definitely be made in right-hand drive. England is a very important market for us and I think it will also be sold in Australia, especially for lifestyle cities like Sydney. I would like to launch it personally in Australia. It won't be next year but maybe it's the beginning of 2012," Hackenberg said.

The boss of Volkswagen in Australia, Anke Koeckler, said: "The Up! is a crucial part of our growth in Australia. Right now we are negotiating with headquarters. The currency is very good and our forecasting shows us that it will still be good [in two years]."

She said the Up! was not looking likely for sale in Australia in recent years because the global financial crisis hurt the Australian dollar. "But the strong dollar gives us the opportunity."

When asked about the price of the Up! Koeckler said: "It will be never above Polo. We are going to get very serious with this car.

"It fits in the Australian market. The $12,990 Suzuki Alto is doing well. Hyundai is about to launch the i10 and i20 small cars, so we think the Up! is a good opportunity for us and our dealers."

The Up! will initially be available as a petrol engine with manual transmission only. An auto will follow six to 12 months after launch. VW has not said what type of automatic gearbox it will use, but most of its small cars now run twin clutch automated manual gearboxes, and Hackenburg ruled out a CVT auto. "We are not so CVT friendly."

He said the Up! will meet all Volkswagen's current safety standards and likely come with six airbags and available with manual and automatic transmissions.

The Up! concept was rear-engined, but the production car's engine will be under the bonnet.

The Up! is not likely to be a slouch, even though the engine size is yet to be revealed.

Said the VW boss: "The Up! will be a premium car. It will be five star [safety] absolutely. It is based on our modular platform and the drivetrain will eventually power bigger cars."

The petrol powered Up! will be followed by an all electric version in 2013. This is also under consideration for Australia, VW sources admitted.

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