Volkswagen has dropped a bomb on the new-car market by introducing a small car for just $13,990.
The diminutive Up small car – to be sold as a three- and five-door hatchback - is one of the cheapest cars on the market undercutting Korean, Chinese, Thai and Indian-built runabouts.
The Up could also have an impact on the used-car market by enticing buyers who may otherwise have bought a second-hand car.
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Volkswagen is typically seen as a prestige brand and not a price leader but the Up could turn the bottom end of the car market on its head.
The Up will also be the cheapest Volkswagen offered in Australia since the 1980s.
The new Up will be feature class-leading safety features – including an advanced emergency braking system - but misses out on some features taken for granted in new cars.
A five-door Up sells from $14,990 and a Comfort Pack – with 15-inch alloy wheels, fog lights, leather gear shifter – adds $2500 while cruise control and reverse parking sensors can be added for $600.
Volkswagen says the new Up, which is powered by a tiny 1.0-litre engine putting out just 52kW of power and 95Nm of torque, will bring a new level of refinement to the bottom end of the market.
It’s also claimed to offer the friendliness and simplicity of the original “people’s car”, the Beetle, but with “the rational appeal” of the Golf that has seen sales grow by more than 400 per cent since 2000.
It will also bring a full-sized spare tyre.
But the Up is also clearly built to a price. The rear windows don’t wind down, they only pop out. And there are only four seats where most competitors have five.
Wireless Bluetooth connectivity – fast becoming a must-have for all new cars, even budget models – is only available with an optional $500 clip-in satellite-navigation system that also includes a trip computer.
However the Up has an advanced crash avoidance system until now reserved for luxury cars or more expensive models.
The City Emergency Braking system uses lasers to detect an imminent rear-end collision and can automatically apply the brakes. The system is claimed to potentially avoid crashes at speeds less than 30km/h and minimise the impact at higher speeds.
The new Up, which goes on sale early next month, is available only as a five-speed manual. The company initially indicated an automated manual would be offered but the managing director of Volkswagen Australia, Anke Koeckler, says the company is yet to decide whether it will offer the option of a self-shifter.
"We want to see how the car is received before we decide whether we offer the auto," she says, with others at Volkswagen admitting the lukewarm international reception for the Up auto were partly to blame for its initial non-arrival.
The automated manual, which is a single-clutch unit instead of the more complex dual-clutch set-up in other Volkswagens, was criticised on the international launch for being too jerky.
The Up will also be offered with only four airbags, with no head-protecting airbags for back seat passengers, even though other cars of similar size and price come with six airbags. For that reason it won't attract the maximum five star crash rating from independent crash test body ANCAP, the Australasian New Car Assessment Program.
Rivals such as the Holden Barina Spark, Suzuki Alto and Nissan Micra all come with a full complement of airbags.
The Up is more than half a metre shorter than the Polo and its tiny 55kW engine takes more than 13 seconds to reach 100km/h.
Despite this, Koeckler expects the new Volkswagen Up to take sales away from slightly larger mainstream offerings including the Toyota Yaris, Mazda2, Holden Barina and Ford Fiesta.
The Up continues a trend toward downsizing in the Australian market, where three cylinders and four seats is no longer seen as an impediment to sales.
The Up is also expected to spawn a new breed of baby BMWs, including a small SUV.
Vital statistics
Price: From $13,990 (3-door), $14,990 (5-door)
Engine: 1.0-litre 3-cylinder
Power: 52kW at 6200rpm
Torque: 95Nm at 3000-4300rpm
Fuel use: 4.9L/100km
CO2 emissions: 114g/km
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