A letter of intent signed today foreshadows production of large-scale electric vehicles

A letter of intent signed today foreshadows production of large-scale electric vehicles

A number of major design and requirement changes had pushed back development work on a production version of last year’s up! minicar concept well past the 2010 mark, but with the accelerated change in demand for smaller and more fuel-efficient vehicles Volkswagen is speeding up the car’s gestation.

With the second-generation Smart ForTwo and new Toyota iQ currently on sale, VW is hoping to get its own piece of the action in the growing minicar segment, especially in Europe, where it plans to launch a number of new compact models, which also includes the next-generation Polo.
As for the production version of the up!, VW is expected to launch a family of minicars based on the design and built on a shortened version of the NSF platform that underpins the original concept car. While there is a strong chance that the new model will replace the Lupo subcompact, latest reports indicate that VW may revive the ‘Chico’ name first used for a minicar concept back in 1991.

Some of the major changes include a decision to revert back to a FWD chassis to reduce cost and increase interior space, as well as incorporating a lower roof profile.

"The up! boasts a tall design, and as a result, there are limits to its overall aerodynamic performance," VW CEO Martin Winterkorn told AutoWeek during a recent interview. "Our newest car is a good deal lower, and because of this, it carries a lot less drag."

The new car is said to look very similar to the up! and inside there will be space for just two occupants. Power will come from a newly-developed 1.2L four-cylinder petrol engine with direct injection and cylinder deactivation technologies. VW is also planning a 1.2L three-cylinder diesel engine with a targeted fuel-economy of 117mpg (2.0L/100km). After that, the German carmaker will eventually launch a zero-emissions electric version, which is already testing in prototype form at a new electric-vehicle development center set up by VW in Isenbuettel, Germany.

There is still no word on when the first model will be released, and whether or not it will be offered in the United States, but previous reports suggest that it could appear in early 2011. Pricing in Europe is expected to start at about €8,500, or $12,200, and once production has hit full pace VW plans to sell at least 500,000 of the cars annually throughout the world.