Volkswagen morphs Chrysler minivan into Routan

CHICAGO -- Volkswagen is returning to the U.S. minivan market that it pioneered in the 1950s with its flat-nose, rear-engine Transporter (aka Microbus). Instead of a retro van, however, VW will sell a modified Chrysler minivan.

Called Routan, VW's van goes on sale in September, starting at less than $25,000. It was unveiled here Wednesday.

Modifying a Chrysler is quicker and cheaper than developing a modern Microbus, VW says. The automaker hopes to sell 45,000 the first year, a big number for VW in the USA.

"They would have been better off with the Microbus," says Rebecca Lindland, director of the auto group at forecaster Global Insight. She expects sales to be about half VW's projection but notes the Routan does give the brand's loyalists a VW for their family years.

Separately, VW announced it will decide within months where to build a plant in what it calls "the North American dollar region." That would escape the currency-exchange pinch of not being able to raise U.S. prices enough to make up for the strong euro. Keeping costs and prices in one currency is a key reason foreign makers have U.S. plants.

More production capacity also fits an aggressive plan to more than triple U.S. sales by 2018 and nearly double global sales of its eight brands to 10 million by then. The sales leaders, General Motors and Toyota Motor, each sold 9.4 million worldwide last year.

Chrysler will build Routan in Windsor, Ontario. VW-designed changes to suspension, front and rear styling and the interior transform a Dodge Caravan into a Routan. It will be powered by Chrysler 3.8- or 4-liter V-6 engines mated to automatic transmissions.

U.S. minivan sales shrank to about 793,000 last year from 971,000 in 2006 and 1.1 million in 2005, according to tracker Autodata.

VW says it views the minivan market as stable rather than dying. "We see Ford and GM leaving the market as an opportunity," spokesman Keith Price said.

Routan sales should be incremental because VW sells no van now. "The USA is a critical factor in our global strategy," VW board member Ulrich Hackenberg said. "We can't be a global player without having a larger presence in" the USA.

VW's share of U.S. new vehicle sales is 1.4%; its Audi brand has 0.6%, says Autodata.

Contributing: Chris Woodyard