Volkswagen to Decide on Up! Minicar Production Site

VIENNA – Volkswagen AG is expected to decide soon on the European production site of the Up! minicar, based on the concept model unveiled at last year’s Frankfurt auto show.

The Up! will be sold under severalVolkswagen Group brands, including VW and Skoda.

The new small car may be produced at the Skoda Auto a.s. Vrchlabi, Czech, plant, which builds the Octavia and Octavia Tour sedans and station wagons.

“Vrchlabi has good cards in this respect,” Horst Muehl, Skoda’s member of the board responsible for production and logistics, told Ward’s earlier this year. “If the Up! isn’t made in Vrchlabi, we’ll have to do something else at the plant.”

Fred Kappler, Skoda’s member of the board responsible for sales, says the new minicar is intended more for Western markets as an entry-level city car.

“If you were to apply the concept to Eastern Europe, you’d need to define the technical contents differently,” he says.

Cost is the main challenge for the production version, as the new model will be positioned below the Fabia, Skoda’s least-expensive car.

VW Up! intended for Western Europe as low-priced city car.

“Customers will expect the car to be appreciably lower than the Fabia in price,” Kappler says.

In contrast to competitors’ minicars already in the market, such as the Smart and Toyota iQ, Volkswagen wants to offer a vehicle that comfortably accommodates four adults.

“It should definitely be a full-function vehicle for couples, one in which you can pack a lot of baggage and also take along a few friends every now and then,” Kappler says.

The Czech government in May approved a memorandum of understanding with Skoda on financing, as well as a plan to spend some €56 million ($89 million) on road and infrastructure improvements near Skoda plants in Mlada Boleslav and Vrchlabi.

The measures are being undertaken to support planned investments on the part of Skoda, including the Up! project.

In addition to state cash, funding is to come from both cities and the region’s administration. The money will be released once Skoda officially confirms its planned investments.