Volkswagen mum on N. American plant plans

updated 3:09 p.m. ET Feb. 6, 2008

CHICAGO - Determined to increase U.S. sales, Volkswagen AG is entering the minivan market with the elegantly styled Volkswagen Routan, introduced Wednesday at the Chicago Auto Show.

The seven-passenger Routan will be built for Volkswagen by Chrysler LLC at Chrysler’s minivan plant in Windsor, Ontario.

Although the Routan will have a Chrysler frame, engine and transmission, it won’t share Chrysler features such as swiveling seats. But it will have Volkswagen-engineered steering and suspension. It will also have the German automaker’s interior and exterior styling, Volkswagen said.

The 2009 Routan will go on sale this fall starting at less than $25,000, the company said.

The Routan will start with a 3.8-liter V-6 engine and an available 4-liter V-6 for more power. Volkswagen of America President and CEO Stefan Jacoby hinted that a diesel engine could be offered in subsequent model years. It also has dual sliding doors and an entertainment system in the second and third rows.

Jacoby said the minivan would be a candidate to be built in the company's new North American plant. Jacoby wouldn't say where the company plans to build that plant, although he has hinted a decision will come soon. Volkswagen already has one plant in Mexico.

U.S. minivan sales have been in decline with the rise of crossover and small sport utility vehicles. Minivan sales dropped 18 percent last year, and General Motors Corp. and Ford Motor Co. have left the market altogether.

But Jacoby said the minivan market still is approaching 1 million vehicles a year, and Volkswagen would like to capture 3 to 5 percent of that.

"It's big, and we want to have a decent share in it," he said.

Jacoby said U.S. sales are critical to the company's growth. Volkswagen wants to sell 800,000 vehicles in the U.S. by 2018, or nearly four times the number it sold in 2007. He said Volkswagen wants to move from being a niche brand to a mainstream one for U.S. consumers.

"In order for us to grow, we must offer a broader range of vehicles," he said.

The Chicago Auto Show opens to the public Friday after two days of media previews.

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