Due to be launched in Europe in the first half of 2006, the newcomer is said to provide "an off-roader's appearance", along with the agile handling and compact proportions that Volkswagen claims are hallmarks of its baby car.
There's no mistaking the Dune for a garden-variety Polo, thanks to its 17-inch BBS alloy wheels, bespoke front and rear bumpers, and side and wheel-arch protection strips. The Polo Dune also scores roof rails and silver-coloured door mirrors with integrated indicators.
There's no AWD to enhance traction, but the 'soft-roader' does score raised suspension to boost ground clearance and improve visibility and ease of access.
Inside, the Dune features chrome-plated instrument surrounds, aluminium-look pedals, front sports seats, and a leather trimmed steering wheel and handbrake grip.
The standard kit list is impressive, including semi-automatic climatic control, electric windows multifunction computer, radio/MP3 compatible CD player, front fog lights, and electrically heated and adjustable door mirrors.
The Polo Dune will be available with a choice of two established Euro 4-compliant Volkswagen engines, a 55kW 1.4-litre petrol unit, or a 51kW 1.4-litre diesel, which features unit injector technology and variable geometry turbocharging.
Volkswagen boasts the Dune is one of the safest cars in its segment, thanks to the standard provision of ABS with HBA (Hydraulic Brake Assist), driver's and front passenger's airbags, front side airbags and a flat-tyre indicator fitted as standard.
In the UK, the Polo Dune will be priced at £12,645 (equivalent to about $29,500) driveaway, but no official word yet on whether it's destined to join VW's Australian line-up.