FRANKFURT (Reuters) -Volkswagen on Wednesday said it would use the Polo brand name for its planned compact hatchback electric vehicle, previously dubbed ID.2, a key model in the carmaker's efforts to stave off Chinese competition.

The ID.Polo, expected to be priced below 25,000 euros ($29,267) in its no-frills version, will be presented at the IAA auto show in Munich next week although the car will still be camouflaged ahead of its official launch in 2026, Volkswagen said.

"Our model names are firmly anchored in people's minds," Thomas Schaefer, head of the Volkswagen brand and member of the carmaker's management board, said in a statement.

"That's why we're moving our well-known names into the future. The ID.Polo is just the beginning."

European carmakers have come under growing pressure to develop affordable electric vehicles, as cheaper Asian rivals, including China's BYD, are increasingly muscling into the local market.

Volkswagen's finance chief Arno Antlitz earlier this year said that the ID.2 could be the carmaker's first battery-electric vehicle to make equal margins to its combustion-engine equivalent.

The Polo brand accounted for 472,000, or nearly 10%, of the Volkswagen brand's auto sales last year.

($1 = 0.8542 euros)