In 1989, Rick Moranis played a nerdy dad who accidentally downsized his children to an insect scale in Honey, I Shrunk The Kids. He probably wouldn’t have believed it if someone told him that 23 years later automakers would be doing the same thing to their cars.

For those of us living in the North American 2012, there are increasingly large swarms of little cars buzzing around the streets. The din their tiny engines makes isn’t overwhelming yet, but just wait.

General Motors’ German subsidiary, Opel, is planning to release a micro car they’re calling the Allegra (or, tentatively, Junior). No, not the allergy medication, though the thing is small enough to be mistaken for a bee in ragweed season, at least compared to the standard American palate. When the Allegra hits Europe in 2013 it will probably stand to compete against cars like the Volkswagen Up, MINI Cooper and Fiat 500.

In fact, it’s a solid 3.3 feet longer than the Mercedes-Benz spawned Smart ForTwo, which looks like a cross between a golf cart and an alien space pod. Our spies caught the Opel Allegra on camera during winter testing, but what’s the big deal? Opel cars aren’t sold in North America, right?

Well, not necessarily. Rumors are floating around that the not-so-smallish micro car might make it overseas rebadged as a Buick. (Why not? It’s not the first Buick to come from Opel). And with the recent launch of the Fiat 500 and the Scion iQ on our shores, the market for mini-cars is growing.

Of course, the name will likely change to keep big pharma happy.

GALLERY: Opel Allegra/Junion Spy Photos

Hyundai has made incredible gains in the global market, challenging larger automakers in markets they once dominated. While Volkswagen has globally sold a record number of vehicles in 2011, Hyundai Motors and its Kia affiliate have exceeded VW’s numbers in the United States. According to senior analyst of auto website Edmunds.com Jessica Caldwell, “Hyundai offers compelling design at an affordable price– a win-win for must consumers. Brand exposure has long been the problem for Hyundai, but that has certainly eased.” The South Korean automaker has made some smart moves to gain publicity, including ads aired during the Super Bowl as well as the company’s sponsorship of the World Cup.

The pressure on Volkswagen doesn’t end at North America, however, as Hyundai intends to bring the fight to Europe as well. Chief operating officer Allan Rushforth for Hyundai Europe said, “It’s very important for Hyundai to be successful. Europe is a top priority because it affects how the company is perceived elsewhere.”

Just as European nations tackle a debt crisis and consumers face austerity measures, Hyundai looks to offer products that mix great value, reliability, European styling and handling. While Volkswagen focuses its attention on challenging GM and surpassing them for the title as world’s largest automaker, Hyundai sneaked up on the German Automaker as Stefan Bratzel, director of the Center of Automotive Management at Germany’s University of Applied Sciences, said, “Hyundai is one of VW’s most serious challengers. The mix of good value, quality and design is a solid basis, and they’ve been getting more innovative every year.”

During the Frankfurt Auto Show in September, a video was posted on YouTube capturing a concerned conversation between VW CEO Martin Wintekorn and his associates at Hyundai’s show floor. Upon studying the adjustable steering column inside the Hyundai i30, Winterkorn  noted, “Nothing rattles. Why can they do it? BMW can’t. We Can’t.”

Winterkorn adds, “It’s become increasingly clear that whoever’s at the front has a lot of opponents. Our competitors are attacking Volkswagen all over the world.”

For Hyundai’s European offensive, the South Korean automaker has prepared a $12.4 billion investment, intended for plant upgrades and vehicle technology development.  Meanwhile, Volkswagen steels itself against imminent competition by holding onto a 62.4 billion euro budget to invest in factories and new vehicles over the next five years.

GALLERY: Hyundai Elantra

[Source: Bloomberg]

Swedish automaker Volvo is looking to shack up with a new mate in the hopes of making a fresh set of small cars. Their current compact, the C30 (above), is based on technology from former parent company Ford.

However, Ford dumped Volvo almost two years ago, passing them off to Chinese Geely Holding Group for $1.8 billion, a fraction of what they originally paid. Now the company says the are welcoming partnerships with other companies to fill the void their former American partner left behind.

Volvo CEO Stefan Jacoby told the Financial Times that the company is open to new partners who will be able to share in developing further compact models alongside Volvo in an effort to drive down production costs.

There isn’t an official decision yet about pairing up with any specific company, though it makes sense that Volvo would be looking for a new dance partner given that their current C30 line is nearing the time when a model typically gets a refresh.

The collaborative strategy is becoming increasingly common among automakers as profit margins start to wear thin. Last year Volvo agreed to work with German company Siemens to produce an electric vehicle.

Aside from business to business collaboration, Jacoby is taking Volvo in a similar direction as the last company he managed: Volkswagen. In an effort to cut costs, he’s taken the company from offering 10 engines to only two. He’s also implementing something similar to VW’s “modular box” approach to building cars, where multiple vehicles of different sizes are made in the same facility.

In the spirit of consolidation, Volvo is also expected to launch the compact V40 at the 2012 Geneva Motor Show this March. That car will replace the current S40 and V50 models.

[Source: Financial Times]

Americans aren’t the only ones who love bigger cars, it turns out people in the Middle East do too.

At least that’s the way it seems to us after learning that the American version of the Volkswagen Passat will premier at the 2012 Qatar Motor Show. As is often the case with German cars, there is a European and U.S. version sold in their respective regions. Generally the American version is a bit bulkier in keeping with our larger interests.

The base features are more-or-less the same, though it looks like the expatriated Passat which is assembled in the U.S. will come with a standard touch screen. Otherwise, the same five-cylinder 170 horsepower engine, 16-inch wheels and standard trim are intact. ABS and ESP are also both standard.

The truth is, the 2012 Passat really does approach luxury status. The longer American wheel base will do a good job of offering comfort for rear passengers and retaining the high-end feel German cars are known for. Volkswagen hopes that by offering the more spacious version they will attract a combination of business and private consumers, though there isn’t any word on the SEL V6 model we reviewed being included.

GALLERY: 2012 Passat SEL V6

The Volkswagen Golf will remain the best-selling car in Europe, but here’s the real news: it keeps the crown with a whopping 484,547 units sold.

Numbers might not mean much to most people, but this will put things into perspective: at 1.6 million units worldwide, BMW stood fast as the world’s largest luxury car brand. Those are worldwide sales figures. VW came close to the half-million mark in Europe alone and with just one model.

As far as American bravado is concerned, we can’t come close to touching those numbers. The top-selling car in the U.S. was the Toyota Camry with 308,510 units. To be fair, all you need to do is delve into the popular world of pickup trucks to find that the Ford F-150 sold about 100,000 more units in the States than the Golf did in Europe, but the fact remains that Volkswagen is killing the competition with their catchy compact.

If VW has its way, the Golf will remain in the top spot for its seventh generation— set to debut at the Paris Auto Show in September. Sales actually dropped by 2 percent last year, though such fluctuations are typical towards the end of a model cycle.

Read AutoGuide’s 2011 Vw Golf Review Here

GALLERY: 2011 Volkswagen Golf

[Source: Automotive News]

Volkswagen has confirmed the development of a production version of the mini hot hatch Up! GT.

One of the many variations of the Up! concept that was unveiled at last year’s Frankfurt motor show, Volkswagen emphasized that the Up! GT will drive and perform very closely to the original Golf GTI, which Volkswagen enthusiasts were no doubt happy to hear.

Details on the Up! GT are limited but we know that it will be motivated by a turbocharged three-cylinder engine mated to a six-speed gearbox, producing 110-hp. While the numbers are modest, we’re expect to see a lot of Up! GT city cars darting through city traffic in the future.

[Source: pistonheads]

Good news – Volkswagen has just released a 60-second teaser ad called “The Bark Side” to get us excited about this year’s Super Bowl offering that will air during the big game on February 5.

Playing on last year’s “The Force” commercial, “The Bark Side” stars 12 cute pooches regaling us with a rendition of the “Imperial Death March.” The dogs are outfitted in various Star Wars outfits that would make even Darth Vader melt.

“The Force” ad went viral after it aired during the Super Bowl, so VW fans and ad enthusiasts alike are eagerly awaiting the newest commercial, which will be 60-seconds long (last year, VW ran two 30-second ads). The new ad is expected to feature the VW Beetle, and you can expect the Star Wars theme to carry over. In fact, at the end of “The Bark Side,” you’re directed to visit a URL on VW’s website that features an “Intergalactic Invite Creator.” It lets you create cool Super Bowl party invites that can be personalized with your friends’ names written in the stars just like the Star Wars title crawl.

“The Bark Side” closes with a promise that VW is “Back. And Better Than Ever.” We can’t wait to see if the new Super Bowl ad makes good on that affirmation. You can watch “The Bark Side” after the jump.

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The 2013 Volkswagen Beetle TDI is set to make its debut at the upcoming Chicago Auto Show. Though there aren’t any confirmed details yet on the diesel-powered Beetle, it’s expected to feature a 2.0L turbocharged, inline-four in its engine bay.

The same 2.0L can be found in the Volkswagen Golf, Jetta and Passat, with 140-hp and 236 lb-ft of torque with six-speed manual and DSG transmissions available. In the Passat, this powerplant has been good for up to 43-mpg on the highway, so it’s safe to assume the Beetle will get the same, if not even a little better.

What is even more interesting is the speculation that VW might give its Beetle Convertible a diesel variant, making it the first clean diesel convertible in the United States. That’s not confirmed yet though, but stay tuned to AutoGuide.com as we head towards the 2012 Chicago Auto Show to get all the details later on in early February.

GALLERY: 2012 Volkswagen Beetle

[Source: Autoblog]

Volkswagen’s Golf is getting a makeover, marking the seventh incarnation of the marque.

Details on the Golf VII are still vague, except the official public reveal, which will take place at the 2012 Paris Auto Show. With the trend towards fuel economy, and the Golf’s history of being a very fuel conscious car, one can only assume that the next generation of the hatchback will move further in that direction. For power plant options, odds are that many of the engine choices from the current model Golf will carry over, such as the BlueMotion TDI engines and the smaller TSI motors – with of course GTI and Golf R models to follow. Then look for an electric model and possibly even a diesel-electric hybrid.

Based on the band’s new MQB platform, the Golf VII will also be getting a little bit lower and a little bit longer as VW looks to draw some sports car looks out of the little hatchback.

[Source: Auto-Motor-Und-Sport]

That’s according to a statement made by Don Chambers, chairman of the National Automobile Dealers’ Association (NADA) government relations committee.

Under the Obama administration, the plans to boost Corporate Average Fuel Economy standards to a fleet average of 54.5 miles per gallon by 2025 would require the adoption of advanced technologies for each vehicle, in order for automakers to achieve them. It would also mean that a portion of the costs in utilizing these technologies would end up being passed onto consumers, which could result in pricing a number of potential new vehicle buyers out of the market.

A study, which NADA plans to release in February will show that the costs associated with using new fuel saving technologies will be far in excess of government projections, by as much as 60 percent in fact, which means the sticker price of a new vehicle could increase by as much as $5,000.

Chambers’ comments were made during a hearing in Detroit, where members of the public are given the chance to voice their comments on the proposed CAFE regulations, before they’re finalized later this year. Two more hearings are scheduled for later this month, one on January 19 in Philadelphia, another on January 24 in San Francisco.

However, despite criticism from the NADA, the proposed CAFE regs have strong support, not only from environmental groups like the Sierra Club but also the United Auto Workers’ Union and no fewer than 13 automakers, including the Detroit triumvirate of Chrysler, Ford and General Motors.

In fact, many of those  who attended the Detroit hearing, believe that in the long run, tougher fuel economy standards will ultimately save motorists money thanks to fewer trips to the pumps, as well as reducing US dependence on foreign oil supplies.

However, German automakers Daimler AG and Volkswagen, which currently offer some of the most fuel-efficient vehicles on sale in the US, won’t back the CAFE proposal because there’s no incentive for diesel fueled vehicles.

Chambers says he supports the notion for more fuel efficient vehicles, but if it increases the price to the point that buyers can no longer obtain financing then “it makes no difference.”

Mitch Bainwol, who heads up the Alliance of Automobile Manufacturers believes that, at the end of the day, consumer buying habits will ultimately decide whether automakers can actually meet the proposed Federal fuel economy standards, he also proposes a thorough mid-term review of the CAFE policy to see if the rules actually relate to fuel price trends, technological advances and consumer buying habits.

“Looking into the future, consumer purchasing patterns will be the biggest unknown,” he said, though given CAFE’s patchy track record, perhaps looking at lessons from the past could help paint a clear picture of what’s to come.

[Source: Automotive News]