Back in 2002, Volkswagen created a highly frugal concept dubbed the ‘one-liter’. It was a two-seat, one-cylinder cigar-shaped economy car that promised tremendous fuel economy – up to 282 mpg! But because of the high price of carbon fiber at the time – the one liter’s main construction material – the project was put on hold until at least 2012. However, a new report indicates VW brass has given the project the green light two years in advance, with the one liter now slated for production in 2010.

According to CarMagazine.co.uk, the one liter’s overall design hasn’t changed much since 2002. The production car will retain its 1+1 seating style, as well as the concepts canopy door.

Weight and aerodynamics will be the name of the game with VW doing everything it can to maximize both. Review mirrors will be replaced with cameras and non-essentials for a vehicle weighing less than 700 pounds – such as power steering and power brakes – will be left off. Despite the amazingly light curb weight, the one liter will still feature a driver’s airbag, ABS and ESP.

The original one liter was powered by a one-cylinder engine, but the production version will use a two-cylinder diesel engine. A hybrid powerplant is also said to be part of the equation, which will allow for partial zero-emissions operation. Power will be sent to the wheels via a motorcycle-sourced transmission.

VW’s ultimate green machine is expected to retail anywhere from $32,000 to $48,000, with production expected to be limited to 1,000 examples.

As outrageous as the idea of a production 1L/100km (235mpg) car sounds, more reports have emerged confirming the ultra-frugal car is in fact in development and that it could be on the market by as early as 2010. At last year’s Frankfurt Motor Show senior VW exec Ferdinand Piëch claimed the car would be available by the end of the decade and a month later, CEO Martin Winterkorn backed up the claim as well as providing some of the production details. The latest reports indicate the car might not be a single-cylinder petrol design like the concept, but a two-cylinder diesel-electric mild hybrid.

Discussing the car’s sales potential last year, Winterkorn stressed that the 1-Liter “would not be a best seller” and thus will only be produced in limited numbers. Its body will be constructed from carbon fiber, plastic and magnesium. Top speed with the one-cylinder 0.3L engine of the 2002 1-Liter concept was expected to be around 120km/h with average fuel consumption around the 1L/100km mark (235mpg). Those numbers aren’t expected to change much with the shift to the diesel hybrid design. The change is expected to add drivability and low-end acceleration to the car, although its lightweight will also make easy work for even the small engine and motor combination.

The vehicle’s weight is estimated to be a mere 300kg (660lb) thanks to its small size, tandem seating configuration and lightweight construction. That would make the car a very difficult structure to secure in the event of an accident, especially with the panoramic fighter-jet style canopy over the occupants and the very low profile of the car. VW seems confident that it can get the car produced and certified for on-road use, however.

Pricing is expected to fall somewhere between €20,000 and €30,000 ($31,400 to $47,100). Assembly is tipped to take place in VW’s prototype shop, which can produce 1,000 cars per year at full tilt, reports CAR.

The version from 2002 ended up doing even better than its target fuel efficiency, requiring just 0.89L/100km (achieving 264mpg). Whether the new diesel hybrid will achieve similar results remains to be seen. Click here to read our previous story on the VW 1-Liter.