VW testing the Up in an alpine region of Europe. The VW Up is expected to debut in 2011 as a 2012 model. VW is also developing an all-electric variant of the Up called the E-Up.

Here we have the first sighting of a Volkswagen Lupo / Up prototype testing in Europe.

The last time our spy photographers caught the Lupo was over the summer with two prototypes spotted doing some hot-weather testing in Death Valley.

Development seems to be progressing, with the Lupo doing what appears to be some mountain/high altitude testing somewhere in Europe while wearing German plates.

The Lupo is still outfitted with some pretty heavy camo, so it's hard to say what design elements of the previous concept models we've seen of the Lupo will make it to the final production car.

Just like the previous generation Lupo, the minicar will be slated beneath the Polo in VW's product lineup. It is expected in 2011 as a 2012 model and will come as both a 3-door hatch and with an extended 5-door hatch variant as well.

VW is also promising an electric version of the Lupo. A concept E-Up! has been previewed with a 60 kW electric motor producing 210 Nm of torque.

Engine options on the standard Lupo are expected to include a 1.0 liter, 3-cylinder petrol/gasoline engine with 75 PS (74 bhp / 55 kW), a 1.2 liter TSI with 86 PS (84 bhp / 63kW) and a 1.2 liter diesel unit also with 75 PS.