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Volkswagen Up! city car to challenge Toyota


Volkswagen AG will roll out the new Up! city car next month to tap growing demand for small, fuel-efficient vehicles as Europe’s biggest auto maker aims to claim the industry’s top global sales position.

The Up! will be unveiled on September 12 at the Frankfurt auto show and go on sale in Europe in December, VW said today in an email. The four-seat model, which will compete with Toyota Motor Corp’s Aygo subcompact and PSA Peugeot Citroen’s C1 mini, will cost about ¤9,500 ($13,600), said a person familiar with the product who declined to be identified because the price has not yet been officially announced.

The Up! will be the first VW brand car built entirely from scratch to come to market under Chief Executive Officer Martin Winterkorn’s leadership. The vehicle is strategically important for Winterkorn, who took over in January of 2007, because customer demand for compact vehicles is increasing and governments are pushing carmakers to lower emissions.


“It’s a valuable addition to VW’s broad product portfolio,” said Tim Schuldt, a Frankfurt-based analyst at Equinet AG who recommends buying VW stock. “Small vehicles are becoming ever more important. The Up! will create a whole new model line with good potential to penetrate markets.”

Wolfsburg, Germany-based VW is forecasting a five per cent increase in global deliveries this year after selling a record 7.2 million cars, sport-utility vehicles and vans in 2010. VW’s group sales rose 16 per cent last month to 665,600, extending seven-month gains by 14 per cent to 4.75 million, the company said Aug. 19.

The Up!, which will be built in Bratislava, Slovakia, where VW also makes bodies for Porsche AG’s best-selling Cayenne SUV, is 3.54 metres (11.6 feet) long and 1.64 metres wide, marginally bigger than the Aygo which measures 3.42 metres and 1.62 metres.

VW’s smallest and cheapest model will have a three-cylinder engine, delivering as much as 75 horsepower, and be furnished with an emergency-brake function to avoid collisions at speeds of less than 30 kilometres per hour (18 mph).