Volkswagen’s new super-mini which was previewed as the up! concept at the Frankfurt Motor Show last month may end up costing quite a bit more to buy than originally thought. While VW had been targeting an 8,000 Euro price point it now looks like the opening bid will be 8,950 Euro with the four-door version coming in 500 Euro higher. Keeping manufacturing costs to an absolute minimum has been the top priority for VW engineers and that entails using standard off-the-shelf components as much as possible rather than items specifically developed for the car.
VW is looking at their Czech division Skoda as a production source. One other cost saving measure that is being considered is a nine year product life-cycle rather than the usual seven years that VW’s stay in production. The volume targets for this car are substantially higher than the smaller Smart ForTwo. VW is planning on 100,000 units annually under their own brand in Europe with another 200,000 under the Seat and Skoda brands. Emerging market sales are expected to bring the total to over 460,000 per year. With those kinds of volumes, it critical that the cost be kept low to make this low-priced machine profitable.