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Volkswagen said today that its upcoming Up! compact car will be delayed by up to five months as it plans to switch the engine from the rear to the front. The Volkswagen Up! was originally scheduled to arrive in 2010 but will now be delayed until early 2011 according to Volkswagen sources.

The delay will allow rivals planned by Toyota and Fiat to hit the market earlier than the Up!. Toyota plans on launching its iQ in Europe early next year while Fiat plans to launch its Topolino at the end of 2009. Both of these models will be front-engine.

According to Winterkorn, Volkswagen’s CEO, the German automaker favored front engine to cut development costs, overruling the engineers who fought hard for a rear-engine Up!.

Volkswagen plans on selling 500,000 units of the Up! in the U.S. and Europe along with other emerging markets. It will also help Volkswagen boost sales to 10 million by 2018.

Source: Automotive News (Subscription Required)

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