Volkswagen was caught recently testing the next generation Volkswagen Lupo in hot weather conditions with a Skoda counterpart.
The car is said to be heavily based on the Volkswagen Up! Concept car first unveiled at the 2007 Frankfurt Motor Show.
Although these test cars appear to be strict two-door, four-seaters, there are also plans for a larger five-door model to be launched about a year after this two-door version is released.
Engine options are said to include petrol and diesel options and even an electric powerplant planned further down the track.
Both the Volkswagen and Skoda packages will take up presence in the city car category and feature very small engines. It's hard to spot the difference between the VW and the Skoda, especially with heavy camouflaging.
Sources say the two cars will be distinguishable via minor detailing differences.