NASHVILLE, TN – Count Volkswagen AG officially in the U.S. minivan segment, now that Routans are beginning to arrive in showrooms this week.

Volkswagen enters the minivan market after General Motors Corp. and Ford Motor Co. already have exited, leaving Chrysler LLC to defend the top spot against credible challenges from the Honda Odyssey and Toyota Sienna.

Although some buyers shy away from minivans for their conservative styling and sales are declining, the sector continues to show some signs of life.

“From the customer standpoint, what we see is a couple life stages where people benefit from the minivan,” Bret Scott, product planning manager for Volkswagen of America Inc., tells Ward’s during an event here to show off the new Passat-based CC 4-door coupe.

“If they can get over the philosophy of owning a minivan, which we find a lot of people do, if it’s a cool Volkswagen, we think they’ll get into it and they won’t get out of it,” Scott says.

The VW Routan comes to market courtesy of a partnership with Chrysler, which is producing the minivan at its plant in Windsor, ON, Canada, alongside the Chrysler Town & Country and Dodge Grand Caravan.

Much of the running gear, such as 3.8L and 4.0L V-6s and automatic transmissions, carry over from the Chrysler products, and VW did not tinker significantly with the basic Chrysler concept.

“I think the biggest challenge for the Routan was not to turn it into a (more sporty VW) GTI because the temptation was very great,” Scott says. “We wanted to make the purest Volkswagen minivan, but there are some hard and fast rules in the minivan segment that have to be followed with regard to chair height, comfort and off-center feel.”

But VW engineers fiddled with the steering for more of a European touch and tweaked the standard suspension tuning, achieving 15% more stiffness than the equivalent Chrysler vans, Scott says.

“Our target is the Odyssey. If you drive all the minivans side by side, I can understand why…people like the Odyssey,” he says. “We tuned the Routan so it’s very responsive and very controlled but also gives you all the things you’d expect in a minivan: comfort and quietness.”

In the cabin, the VW Routan does without some of the Chrysler features, such as Swivel ‘n Go and Stow ‘n Go seating. But the seat can be removed for hauling big loads.

The Routan will sell only in the U.S., Canada and Mexico, with a base price of $24,700, slightly lower than Odyssey, but higher than the Chrysler minivans.

As for a diesel Routan coming to the U.S., Scott says he “wouldn’t rule it out,” but that it’s not in the product plan, either. “There’s certainly a considerable investment to put a diesel in.”

Chrysler produces a small diesel engine for minivans it sells in Europe, but Scott says, “I don’t think it would do very well here. It probably would need a V-6, and we’d probably want our own V-6.”

Under contract, VW will source minivans from Chrysler for five years. After that, Scott declines to say if VW will produce its own minivans, perhaps at the new plant the German auto maker is building south of here in Chattanooga, TN.

A visit to the 1,300-acre (526-ha) site finds earth movers and plenty of activity en route to construction. The plant will produce a midsize sedan beginning in 2011 at a rate of about 125,000 units annually.

VW has not announced what other vehicle will occupy the remaining 125,000 units of capacity. The site also will accommodate suppliers to the plant, but the auto maker has not yet said how many.

In 2007, minivan sales dropped 18% to 793,338 units in 2007, compared with 970,698 in 2006, according to Ward’s data.

Through the first eight months of 2008, 441,932 minivans have sold in the U.S., and the Odyssey is the best-selling single nameplate in the segment, according to Ward’s data. However, with the Town & Country and Grand Caravan, combined, Chrysler remains the overall volume leader by a wide margin.

Meanwhile, Scott says he is glad to put to rest the question as to which auto maker pioneered the minivan segment.

Readers of Ward’s repeatedly credit the VW Microbus as the first minivan in the U.S., dating back to the 1960s. But Chrysler generally gets credit for producing the first modern, front-wheel-drive minivan, beginning in 1984.

Scott says the Chrysler minivan “defined the general layout of the vehicle, and it defined what all other minivans following it are basically designed around. I would say we had the first people carrier for the people, but it wasn’t a minivan.”

tmurphy@wardsauto.com