Volkswagen will shave as much as 100 kilograms (220 pounds) from the weight of its seventh-generation Golf by using stronger steel to minimize the metal content, delivering a 23 percent reduction in fuel consumption.

New materials and production processes, part of the Volkswagen Group's new MQB modular manufacturing system will reduce the weight of the seventh-generation model and will be extended to more than 40 small and mid-sized models in the future.

Europe's biggest carmaker expects the shared architecture to cut production costs by 20 percent, manufacturing time by 30 percent and one-time expenses by 20 percent. The savings will help finance upgrades of in-car entertainment systems and the development of new generations of VW vehicles.

A revised version of VW's flagship Golf compact is scheduled to be unveiled on September 4 as the company seeks to gain market share and overtake Japan's Toyota and U.S.-based General Motors Co. to become world No. 1 in sales by 2018.

Volkswagen's strategy favors the use of strengthened steel to reduce overall weight as a cheaper alternative to materials such as aluminum or carbon fiber. 

Reduced fuel consumption will also lower VW's CO2 emissions. The new Golf will emit 13.9 percent less CO2 per car, equal to about 119,000 metric tons in European markets, it said, aiding compliance with tougher environmental rules.

The Golf is Volkswagen's best-selling model in Europe, with sales of 493,855 in 2011.