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VW Up! not down with Oz

Up in the air: Volkswagen's Up! city car - seen here in electric E-Up! concept guise - might not make it to Australia.

Keen Polo pricing and sourcing uncertainties may keep the Up! from rising Down Under

10 May 2010

VOLKSWAGEN’S upcoming baby car based on its Up concept cars is not a guaranteed starter for Australia, according to VW Australia managing director Anke Koeckler.

Speaking to GoAuto at the launch of the fifth-generation A05 Polo in Brisbane this month, the local Volkswagen boss revealed that the company was still investigating if there is space under the light car segment in Australia for the German brand.

“There are always some opportunities,” Ms Koeckler said.

“I am not saying that we are missing out on opportunities in the market right now, because this is where we are and you know about other projects which we are examining … but we have not yet decided.

“With the Polo already (cheaper than the last one by $300) … we have a very good starting point for our customers in terms of value.”

Expected to be badged Lupo in deference to the A03 Polo-based A00 sub-B vehicle built by Seat in Spain for Volkswagen from 1999 to 2005, the Up/Lupo should surface sometime in 2012.

It will be the company’s long-awaited city car follow-up, taking the place of the Brazilian-built Fox that has also never been offered in Australia.

3 center imageWith progressive styling overseen by Volkswagen design chief Walter de Silva, the Up/Lupo will spearhead a number of zero-emissions models for the company, in hatch, sedan, people mover and even cabriolet shapes, if overseas reports are to be believed.

Dimensionally it will measure about 3.5 metres long, 1.5m tall, 1.65m wide, and sit on a wheelbase of about 2.5m.

But the Up/Lupo’s Bratislava, Slovakia, manufacturing base may prove too distant for Volkswagen Australia, particularly as profit margins in this segment of the market are slim at best.

Nevertheless, with Volkswagen’s recent 19.5 per cent acquisition and subsequent investment agreement with Japan’s Suzuki Motor Company, another less expensive sub-B or A-segment (Smart/Toyota iQ sized) vehicle to the Up/Lupo from a cheaper manufacturing source could open up the possibilities for Australian baby car buyers in the mid to long term.

Right now though, Volkswagen’s latest pricing strategy with the Polo sees a marked increase in standard specification (mostly safety related) coupled with a modest price drop of $300 for the entry-level Trendline three-door hatch.

The resulting $16,690 opening gambit places the Polo right among the mid-level range of light cars sold in Australia, as defined by the Toyota Yaris YR, Mazda2 Neo, Ford Fiesta CL and Suzuki Swift.

Currently, only Suzuki offers a vehicle beneath the established light-car segment in Australia, and that car – the three-cylinder Alto five-door hatch – is imported from India – a potential manufacturing source for the next sub-B Volkswagen city car. A combined model could even replace both in the middle of this decade.

Interestingly, in the light of the Suzuki tie-in, the Swift was not mentioned by Ms Koeckler as the potential rival to the new Polo, despite the former’s continuing good sales form and price point positioning that sees it stand right up against the Spanish-made German.

At the Frankfurt motor show in September last year, Volkswagen declared that the production version of the Up/Lupo will be “the Beetle of the 21st Century” when it arrives by 2013.

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