NEW YORK (AP) — Volkswagen said Thursday that it will produce a new two-seat plug-in hybrid vehicle that it claims will be the most fuel-efficient production vehicle in the world.

The XL1 combines a light-weight design with a plug-in hybrid system that includes a 47-horsepower, two-cylinder diesel engine, a 27-horsepower electric motor, a seven-speed dual-clutch automatic transmission and a lithium-ion battery. By European standards, the car will get a combined 261 mpg and will be able to travel up to 32 miles in its all-electric mode, the German automaker said.

The XL1 has a top speed of 99 mph and can accelerate from zero to 62 mph in 12.7 seconds. Its futuristic design includes enclosed rear wheels and butterfly doors.

The car will be produced in Germany. Volkswagen didn't say how much the vehicle will cost, when it would go on sale or in what markets it will be sold.