The production of the Up strengthens the market presence of VW on the small car race together with the planned release of the new version of Polo early 2009.

The car manufacturer utilizes the platform of the New Small Family template for front engine small vehicles. This idea also saves the companies hundreds of millions of dollars.

The Chico brand of VW, used in the early 1990’s for their small concept car, may be revived for the new release. The new city car will have a lower roof line contrasted to the tall architecture of the Up.

The new design of the VW small city car will provide better aerodynamics resulting to less drag when cruising on the road. The car will follow the exterior lines of the Up and will have enough inside space for two adults and some luggage.

VW puts a 1.2L 4-cylinder engine using direct injection and capable of cylinder deactivation under the hood of this new car. There are also plans to install 1.2 liter diesel engine running on 3 cylinders. The designers of VW aim to give it a fuel rating of 117 miles per gallon for the diesel version.

According to VW officials, they are also planning to build an electric version of the new Smart competitor maximizing the technology from Toshiba. Prototypes of this vehicle are currently being developed in a facility in Isenbuettel Germany.

There is no official word when this VW small car will hit the streets of the US.