Volkswagen Up! heading for production

Confidential documents leaked from Volkswagen have revealed the group’s expectations for its new breed of rear-wheel-drive small cars.

We got our first glimpse of this next generation at the Frankfurt motor in September, in the form of a cleverly-packaged, rear-engined city car concept called the Up!.

It’s expected to go into production in 2010 and will most likely be built at one of Skoda’s factory in the Czech Republic that is currently being modernised to cope with extra production capacity.

VW estimates sales of 4.1 million models over a nine-year lifecycle and considers this its biggest project since the original Beetle was phased out for the Golf in 1974.

Around 200,000 cars a year will be sold in Europe, badged as Volkswagens, Seats and Skodas. Developing markets such as Russia and India will make up a significant proportion of the remaining demand.

The production model based on the Up! concept will be cheap to buy and run, with three-door versions expected to cost around £6000.