Pricey Up! under consideration for Oz

BOLSTERED by more favourable exchange rates between the Australian dollar and the Euro, Volkswagen hopes to introduce its long-awaited Up into Australia, despite an expected price premium that will position its smallest-ever car against larger light car competition like the Toyota Yaris.

“We are in negotiations right now with HQ,” Volkswagen Group Australia managing director Anke Koeckler told us.

“We have a better situation with the currency… and there is a strong possibility for this car in the Australian car market.

“The Suzuki Alto is doing quite well, and Hyundai is looking at launching the i10 alongside the i20, so it is a good opportunity for us. It means additional volume for us and a good opportunity for our dealers, too.”

If the Up does arrive in Australia, the first quarter of 2012 is probably the earliest timeframe.

VW’s Fiat 500-sized ‘sub-B’ sized city car, due for an international debut at the Geneva Motor Show next March, would serve as a youth-baiting entry-level proposition for the German brand.

It will not be ‘cheap’ like the conceptually similar sub-$12,000 Suzuki Alto as it would unlikely start from much below $15,000 in today’s prices.

However, that price point would still be $1500 less than Volkswagen’s current entry-level model, the $16,690 Polo Trendline three-door that is sourced from Spain.

Volkswagen board member and head of product planning Ulrich Hackenberg said the price premium will be justified by the usual high levels of Volkswagen design, engineering, safety, refinement and quality.

“The Up will be a very exciting car, and a very ‘Volkswagen’ car,” he told GoAuto on the eve of the Paris show late last month.

“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.”

But, as a result, low pricing will be out of the question.

“The Up (will be) exported to other countries, (but will not) be in the price range of its locally produced (competition),” Dr Hackenberg warned.

“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).”

Unrelated to the Polo, the Up is based on Volkswagen’s new transverse modular design platform that will spawn a number of different body derivatives for most of the wider Volkswagen Group – including Skoda and SEAT.

However, some Polo engines are likely to be utilised in the Up, including the 1.2-litre TSI unit. Early versions will be petrol and manual only, but an automatic transmission model is in the pipeline.

There will also be a zero emissions model using electric-battery power.

“The EV version will come in 2013, with some fleet cars coming earlier,” said Dr Hackenberg.