All new Passats will have ABS, four airbags, remote central locking plus alarm, all round electric windows and electronic climate control, front seat height adjustment, rake and reach adjustable steering wheel and an on-board computer.
Estate versions will also go on sale in January, and will command a premium of £950 over the saloons. Volkswagen has already had more than 2,000 orders for the Passat and expects to sell 20,000 saloons and 7,500 estates in the UK in 2001.
Other Volkswagen models have seen significant cuts in price. The Golf GTI three-door now costs £14,805 - a cut of £1,150 - while the price of the flagship Golf V6 4MOTION is cut by 11% or £2,450 to £19,540.
A spokesman said: 'The average reduction is 7%, which combined with the 4% improvement made in January, means that Volkswagen products have improved in value this year by around 11% overall.
'Since May 1998, the company has not raised prices, but continuously added specification, for example, airbags, ABS and air conditioning to a wide range of models at no extra cost to the customer.'
Sample prices (old prices in brackets): Beetle 1.6 (£12,995) £12,395; Golf GTI 3dr (£15,955) £14,805; Golf V6 4MOTION (£21,990) £19,540; Passat SE TDI PD (£18,900) £17,005; Passat Sport 20v Turbo (£19,515) £18,045; Passat V6 4MOTION (£24,140) £21,740