VW delivers price blow to Japanese small cars

The price of being a badge snob just became more affordable. With the release this week of the latest generation Volkswagen Polo you can now get a European badge for Japanese-car money.

Volkswagen has fired a shot across the bows of top-end contenders in the Light Car class by releasing the new Polo with a starting price of $16,690 for a three-door model powered by a 1.4-litre petrol engine.

That's $300 less than the outgoing model and yet the new Polo has six airbags, stability control, a bigger body and more comfort and convenience items, plus a full size spare tyre and a digital speedometer.

The Polo's starting price undercuts the top seller in the class, the Toyota Yaris 1.5, which in three-door form starts at $17,340 – and that model only comes with two airbags. Toyota does offer a cheaper Yaris three-door, but that's powered by a 1.3-litre engine.

The news comes just two days after Mazda announced a sharp price for its updated Mazda2 hatch: $16,990 drive-away. But it, too, only has two airbags as standard in base trim.

"Polo is crucial for us to make our next step in the Australian market," says the boss of Volkswagen Australia, Anke Koeckler. "We want to make sure our first shot is the best shot. We want to be a major competitor in the Light Car class. We believe this is the right product for the right moment."

Koeckler named the target rivals for the new Polo as "the Mazda2, Ford Fiesta and  Toyota Yaris" and described the new Polo as "the third volume builder for us after Golf and Tiguan".

"To negotiate the price, this was a very long process," she said. "Of the 60 countries to get the new Polo, Australia is among the last because we wanted to get the price right. Australia is one of the most competitive car markets in the world."

The three-door Polo is made in Spain, the five-door Polo is made in South Africa.

Koeckler said the company does not expect the Polo to take sales away from the Golf. "I don't think it will take sales away from Golf: different price and different size," she said. "Certainly our intention is to add sales not to substitute sales."

As before, there are three engine choices in the regular Polo range, available in two body styles (three-door and five-door) and two equipment grades: Trendline (base model), and Comfortline (high grade model).

However, all three engines are all new.

The base model petrol engine is a 1.4-litre four-cylinder (63kW/132Nm and a fuel rating average of 6.0L/100km).

The flagship petrol engine (until the Polo GTI hot hatch arrives late this year) is a turbocharged 1.2-litre four-cylinder (77kW/175Nm and a fuel rating average of 5.5L/100km).

Meanwhile, the diesel option is a 1.6-litre turbodiesel engine (66kW/230Nm and a fuel rating average of 4.6L/100km).

All engines are available with manual transmission or an optional seven-speed twin clutch automated gearbox (DSG).

There is one catch: all petrol-powered Polos must run on the more expensive premium unleaded: "This is not a problem, the car is so efficient and the cost difference is not that much."

Metallic paint is a $500 option (it was a $700 option) on the new Polo but only three of the seven colours are metallic (silver, black and grey).

Despite being a premium model, the new Polo does not get a wireless Bluetooth phone connection as standard on any model (it's a dealer-fit accessory or part of an option pack). By comparison, Bluetooth is standard on the Toyota Yaris.

Volkswagen is so serious about making an impact locally that it shot a TV advertisement for the new Polo in Sydney -- aimed particularly at men.

Customarily Volkswagen takes ads from overseas and runs them here.

"We wanted our ad to be a bit more fun, a bit more funky," Koeckler said.

The ad, which airs this weekend, is unusual to say the least. It depicts four guys driving in a Polo and their facial features (including facial hair) mysteriously change as they try to out-do each other. The tagline is "follow no-one".

"We wanted an ad that was different to our competitors," she said. "They show a lot of females, we showed a lot of males.

"If you position the car to females you are much more limited. Girls are also driving this car but it is not a girly car.

"We wanted to make men feel at ease driving a small car. To us it made sense to put males in the car."

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