Volkswagen has confirmed that a two-cylinder diesel engine will be offered for the up! city car sometime in 2013.

Volkswagen’s R&D chief Ulrich Hackenberg has confirmed that the German automaker plans on launching a two-cylinder diesel variant of the up! city car in 2013. Aimed to rival the Fiat Panda TwinAir, this new version of the up! will get a modified version of the engine powering the super frugal XL1 which has already been confirmed for a limited edition next year.

Hackenberg said that this 2-cylinder power unit is compatible with the New Small Family platform developed by VW making it likely that we will see in 2015 a production version of the Taigun concept with a two-cylinder diesel engine.

The three-cylinder engines offered for the up! are compatible with the firm’s larger MQB platform so in the near future the seventh generation of the Golf could be offered with a 3-cylinder engine.

Two-cylinder diesel Volkswagen up! due in 2013