VIENNA – Skoda Auto a.s. will launch production of a new transmission for parent Volkswagen AG’s low-cost New Small Family minicar range, also known as the Up!.

The cars will be manufactured at Volkswagen Slovakia a.s. in Bratislava under the VW, SEAT and Skoda brands.

Skoda will invest about E56.2 million ($76.7 million) to adapt its engine and transmission plant in Mlada Boleslav, Czech Republic, to add production of the new MQ100 manual gearbox.

Production capacity is set at 1,000 MQ100 transmissions a day, with 270 new jobs to be created. Launch is scheduled for late 2010.

The MQ100 transmission is intended for gasoline engines with torque up to 88 lb.-ft. (120 Nm).

“We are planning to use the new transmission in the New Small Family at the first stage, with the possibility to install it also in other models of our brand and other small vehicles manufactured within the Volkswagen Group later,” Skoda Chairman Reinhard Jung says in a statement.

Currently, Skoda produces the MQ200 transmission designed for engines with torque capacities up to 148 lb.-ft. (200 Nm).

The MQ100 requires 20% fewer components and weighs less than the higher-capacity MQ200 transmission.

Skoda currently manufactures more than 2,650 transmissions a day. Output may increase to 2,800 units daily in response to increased demand caused by scrappage schemes in a number of countries.