Volkswagen today announced it plans to assemble what it calls the world's most fuel efficient production car that's capable of squeezing out 261 mpg.

The two-seat XL1 has a plug-in hybrid system that follows pure sports-car design principles with a light weight, keen aerodynamics, and a low center of gravity, according to the German automaker.

VW said the 261 mpg fuel consumption figure is a record that has not been achieved by any other vehicle to date. The XL1 also has a top speed of 99 mph and can accelerate from 0 to 62 mph in 12.7 seconds.

Volkswagen is to produce the XL1 at its Osnabrück plant in Germany, using carbonfiber technology, the company said.