A report in Automotive News Europe (ANE) says that Volkswagen has decided not to build another Volkswagen Lupo or Seat Arosa. The report says that the entry-level city-car models, launched in 1998, have been 'big disappointments' for Volkswagen.

ANE says that the cars will be replaced in 2005 with 'much larger models'. Wilfried Bockelmann, head of product development for the VW brand, told ANE: "Customers want more than just a small car. They want value for money and a cheaper car that can carry four occupants with their luggage, particularly in eastern European markets. A successor would therefore be bigger."

DRI-WEFA analyst Colin Couchman told just-auto that a Skoda successor to the Lupo will be offered for the first time, but that it may not be made available to Volkswagen or Seat.

"It makes sense to make such a car available in eastern Europe in particular," he said. "It is also a way to reinforce the differentiation of the brands. Skoda can offer this product, but Volkswagen may not, preferring to pitch its entry-level product a little higher."