Volkswagen Up! City Car to Challenge Toyota

The Up! will be unveiled Sept. 12 at the Frankfurt auto show and go on sale in Europe in December, VW said today in an e-mail. The four-seat model, which will compete with Toyota Motor Corp.’s Aygo subcompact and PSA Peugeot Citroen’s C1 mini, will cost about 9,500 euros ($13,600), said a person familiar with the product who declined to be identified because the price has not yet been officially announced.

The Up! will be the first VW brand car built entirely from scratch to come to market under Chief Executive Officer Martin Winterkorn’s leadership. The vehicle is strategically important for Winterkorn, who took over in January of 2007, because customer demand for compact vehicles is increasing and governments are pushing carmakers to lower emissions.