Wednesday, August 24, 2005

VW Microbus concept

DCX-VW minivan deal likely

Report: Vehicle would be built by DaimlerChrysler for U.S. market to bolster Volkswagen's lineup.

Detroit News staff and wire reports

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DaimlerChrysler AG and Volkswagen AG are in talks about jointly producing a VW-branded minivan for the U.S. market.

Financial daily Handelsblatt, citing company sources, said the automakers were in discussions about the project, and an announcement was expected at next month's Frankfurt auto show.

VW and DaimlerChrysler had no comment.

The paper said the talks were being shepherded by Dieter Zetsche, the incoming CEO of DaimlerChrysler, and Wolfgang Bernhard, who oversees the VW brand for Wolfsburg-based VW.

Bernhard, who was pushed out of DaimlerChrysler last year, only to land at Volkswagen, is Zetsche's former lieutenant at Chrysler Group, which invented and dominates the U.S. minivan market.

DaimlerChrysler has increased U.S. sales and market share and makes the popular Dodge Caravan and Chrysler Town & Country minivans. VW, in contrast, has seen its U.S. sales fall again this year because of a lack of new models, high operating costs and quality issues.

The new VW Jetta sedan -- launched earlier this year in the United States -- has gotten off to a slow sales start, prompting the automaker to offer rebates in some markets. Bernhard told American VW dealers earlier this summer that a minivan was among a group of 10 new models under development.

Handelsblatt said the VW-branded minivan would likely be built by Chrysler and available to consumers by 2007. VW, which has been slow to offer popular light trucks in the U.S. market, is anxious to expand its passenger vehicle lineup with a minivan.