Volkswagen is pushing the development of a new small car generation with a rear-engine format, according to Automotive News Europe's sister publication Automobilwoche. VW management sources told the German publication that CEO Martin Winterkorn is looking into the possibility of building a four-door model as part of a new generation of cars built on the rear-engine platform "New Small Family" (NSF).

VW is developing the idea, code-named "F 07" as a competitor to the inexpensive Toyota Aygo, which is also available in a four-door.

The German carmaker is also examining the market chances of a Multi Purpose Vehicle as well as a convertible built on the new platform. Customers will get to see the rear-engine mini-VW no earlier than 2011, an insider told Automobilwoche. "Any earlier date would be a serious challenge," the source

said.

The four-seater would cost "almost 8,000 euros," on western markets, said the source, with a no-frills version available in emerging markets for 2,000 euros less.

Despite a length of only 3.35 meters, or almost 11 feet, the interior will have the feel of an earlier version of the Lupo, said the source. The Lupo, which was replaced in 2005 by the Fox, was 3.53 meters. The four-door representative of the "New Small Family" would be about 3.55 meters.

VW will preview the minicar with a 3.45-meter long rear-engine NSF show model at the IAA in Frankfurt this month.

The company is also considering reviving the Lupo name for a future NSF model.

The IAA show car will likely carry the name "Up", the middle letters of the model name "Lupo."

VW introduced a concept car in August 2006 in similar fashion, calling it "Iroc" in a nod to the VW Sirocco, which will appear in Fall, 2008. The "Up" will be as wide as the earlier "Lupo", measuring 1.63 meters.

Where the new VW generation will be built will be decided in 2008. "The Bratislava factory has a good chance at winning the production in central Europe," a VW manager told Automobilwoche. The Seat plant in Martorell, near Barcelona, is also being considered. In Germany, "only VW Mosel can be trusted to handle the slim cost structures," the source said.

In an effort to boost weak demand for the VW Fox, which will be replaced by the new rear-engine VW, VW is introducing a special-edition model named "Fresh" in October. "The customer will have incentives of up to 513 euros," according to an internal VW document.