VW Minivan Plans Unhindered by Chrysler Production Move

Chrysler LLC’s move to consolidate its minivan production in a plant also destined to build the new Volkswagen Routan poses no threat to the joint project.

Launch plans for the Routan, which shares a platform with the redesigned-for-’08 Chrysler Town & Country and Dodge Grand Caravan, are unaffected by Chrysler’s market-related decision to idle its St. Louis South site.

Chrysler says its single-shift St. Louis South minivan plant will close “indefinitely” on Oct. 31. But its site in Windsor, ON, Canada will remain on three shifts.

Chrysler is scheduled to build the Routan minivan at Windsor as part of a contract assembly arrangement reached with VW. Pre-production is under way and full production is expected to begin this summer.

Windsor also has some capacity to spare because it had been home to the Chrysler Pacifica cross/utility vehicle, which went out of production last year because of poor sales.

Chrysler says St. Louis is being idled because sagging minivan sales will not support two plants. Minivan deliveries are on course to sink below 700,000 this year, their lowest annual U.S. total since 1986, according to Ward’s data.

’09 Volkswagen Routan set for summer at Chrysler minivan plant.

Gasoline’s skyrocketing price is the primary misfortune to befall the segment. Consumers are trending away from light trucks in favor of more fuel-efficient cars and cross/utility vehicles.

Ford Motor Co. has dropped out in the U.S., General Motors Corp. is on its way out this year, while Hyundai Motor Co. Ltd. is hinting strongly it also may exit. But that won’t dissuade Volkswagen, says spokesman Steve Keyes. “We haven’t adjusted our sales numbers,” he tells Ward’s.

Volkswagen expects to grab about 5% of the segment, or somewhere between 3,000 and 4,000 monthly sales. Last year, Chrysler dominated the U.S. market with 315,000 minivan deliveries – about 20,000 units short of the combined totals of Toyota Motor Corp. and Honda Motor Co. Ltd.

“It’s going to be a challenge for us, but we think our expectations are relatively conservative,” Keyes says, adding the departures of GM and Ford from the segment will benefit Volkswagen.

The auto maker also thinks demand remains among growing families that lean toward import brands with fresh styling, upscale interiors and European driving dynamics. Should Volkswagen meet its sales goal with the Routan, it would rank second in U.S. sales next to its bread-and-butter Jetta lineup.

“Right now we don’t offer anything like the Routan, so it will be a chance for us to hold onto customers that would otherwise leave for another import,” Keyes says.

The Routan incorporates similar features as the Chrysler minivans, including their 3.8L and 4.0L V-6 engines. However, Volkswagen promises its famous interior craftsmanship and suspension and steering optimized for handling and improved driving dynamics.

The Routan will not receive Chrysler’s Swivel 'n Go or Stow 'n Go seating systems. It is scheduled to begin arriving at Volkswagen dealers in August.

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