New VW baby nears Frankfurt – and Australia

VOLKSWAGEN has all but confirmed its all-new Up city-car will become the German brand’s smallest model in Australia next year after its global debut in final production guise at the Frankfurt motor show in six weeks.

Encouraged by the strong Australian currency and increasing demand for sub-light cars locally, Volkswagen Group Australia says its range is almost certain to be expanded in 2012 by VW’s new entry-level hatchback, priced at less than $15,000.

VW Australia managing director Anke Koeckler said in Brisbane yesterday: “We’re very keen on getting Up in Australia because the sub-light segment is getting more important here and will continue to do so in the future.

“I am hopeful of having Up on sale in this country by the end of next year.” As in Europe, the sub-light Up hatchback will slot into the VW line-up under the Polo, which is priced from $16,690 plus on-road costs as a three-door, while five-door versions remain at the premium end of the light-car segment with a $19,850 starting price.

Just as the Polo competes with larger Japanese and Korean-built small (C-segment) cars from mainstream brands, the A-segment Up will be priced in line with larger light (B-segment) models such as Toyota’s top-selling Yaris, Holden’s Barina and Kia’s Rio, all of which will be renewed this year.

Left: Volkswagen Up city car. Below: Other Volkswagen Up concepts - Up Space, Blue-e-Motion and Lite.

Despite that, Ms Koeckler said the Up, which will take centre stage at a massive Volkswagen exhibition at September’s Frankfurt show, would bring a new clientele to Volkswagen – including young buyers and second-hand car purchasers.

“The Up will contribute greatly to the Volkswagen brand in Australia, where it will be our new entry-level model below the Polo and should allow new (VW) drivers and also used-car buyers to experience the look and feel of the brand,” she said.

“But it has to be less than $15,000. The Polo is $16,690, so Up has to be below that.” Ms Koeckler said the Up, which was now firmly back on VW’s local agenda after less favourable exchange rates had previously made it an unlikely starter for Australia, would not be a niche model but a volume seller within the local VW model range.

She told GoAuto last October that VGA was “in negotiations right now with HQ”.

Volkswagen AG board member and head of product planning Ulrich Hackenberg said at last year’s Paris show the Up’s price premium would be justified by typically high VW levels of design, engineering, safety, refinement and quality.

“The Up will be a very exciting car, and a very ‘Volkswagen’ car,” he told GoAuto at the time. “For Volkswagen, it is an entrant into a new, smaller segment, but we are still trying to keep it a real Volkswagen, with all the strengths of a Volkswagen.” While the Up will undercut Volkswagen’s cheapest current model, the Polo 1.4 Trendline three-door built in Spain, it will not match bargain-basement Asian city-cars such as Suzuki’s Indian-built Alto hatch ($11,790 plus ORCs), Proton’s Malaysian-made S16 sedan ($11,990 drive-away) or Chery’s Chinese-built A1 hatch, which is Australia’s most affordable car at $10,990 drive-away.

“The Up (will be) exported to other countries, (but will not) be in the price range of its locally produced (competition),” said Dr Hackenberg. “If we want to be directly competitive in the lower price range then we would have to produce that car in the country (where it sells).” As we’ve reported, the Up is based on Volkswagen’s new transverse modular platform that will spawn a number of different body styles and derivatives for other VW group brands, including Skoda and Seat.

While it is mechanically unrelated to the Polo, it is likely to share at least some engines with the Polo, including the entry-level five-door Comfortline’s 1.2-litre TSI turbo-petrol engine.

Diesel power will also be part of the Up range, which initially will be available only with manual transmissions, potentially delaying its Australian release until late 2012.

Europe’s biggest car-maker has committed to releasing a battery-electric version of the Up by 2013, as previewed by the 2009 Frankfurt show’s ‘E-Up!’ EV concept, one of three Up show cars already revealed.

Ms Koeckler said 2012 would be “the year of emotion” for Volkswagen in Australia, with another brand-building VW model due on sale here in the second half of next year – the redesigned Beetle hatch.