Volkswagen appears to be developing a new 3L car for the European market. The 3L designation refers to the fuel consumption of 3L/100 km (78.4mpg) or less. Between 1999 and 2005 VW sold a version of the Lupo called the Lupo 3L which was had the fuel consumption rating and had a diesel engine, but cost €15,000 which is rather high for a minimalist small car. Because of the high price they only sold 30,000 units over that six year span.

The new 3L car which may share mechanicals with the Audi A1 is targeted at an €8,000 price point which should make it more palatable. If they can hit that target price, it could also be a formidable competitor to the new Smart ForTwo. The new car will probably be equipped with a two cylinder engine, although it's not clear if it will be gas or diesel.

[Source: AutoHaus via GermanCarBlog, thanks to Christian for the tip]

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