Volkswagen and DaimlerChrysler to Build Joint Venture Minivan?

It had to happen. Now that Dieter Zetsche, recently appointed CEO of DaimlerChrysler and Mercedes-Benz, and Wolfgang Bernhard, who now heads up the Volkswagen brand, are in positions of greater influence within their respective automakers, the opportunities for the two executives who once worked together in Chrysler Groups Auburn Hills headquarters to create new synergies are too ripe to pass up.

The first rumor, which was initially reported by Germanys Handelsblatt newspaper, has the two automakers joining forces for Chryslers next-generation minivan. Chrysler, the self-designated "minivan company", would develop a version of its best-selling van for VW to be sold in North America, and possibly other markets.

Volkswagen currently produces a minivan in Europe, the Touran, which could very well find a niche in North America due to its smaller size and resultantly low fuel consumption. But it would never be a mainstream player in a segment where minivans are hardly "mini" anymore, with most bordering on the large side of midsize. North American minivans, or at least those sold here whether through domestic manufacturers or Japanese and Korean automakers, are also more luxuriously appointed than those available in Europe.

Most likely, Volkswagen would want to develop a vehicle that could compete head-on with its domestic and Asian rivals, which would rule out any variation of the Touran. But still, if VW goes ahead with a cooperative arrangement to co-develop Chrysler Groups next generation minivan, it would probably want to incorporate its own proprietary drivetrains, or at the very least offer engine and transmissions to Chrysler Group so that the new VW branded model would measure up to the performance and refinement its customers have grown accustomed to, but there is little information about how the joint venture would be implemented.

The obvious benefit to Volkswagen would be aligning with a manufacturer that has a proven record of minivan success under its belt, and now with its Stow n Go seating system, the most flexible interior in the industry.

The newspaper stated that Zetsche and Bernhard could sign a cooperative agreement to "seal the deal" at the IAA motor show in Frankfurt next month. Volkswagen declined to comment on the report, but two sources familiar with the scheme told the Reuters news service "it had been in the works for some time."

The two sources made it clear that while the deal hasnt been finalized, it has been "approved in principle" by the board of management and supervisory board at DaimlerChryslers Stuttgart headquarters.

Also unclear, is where the new minivan would be built. Currently Chrysler Group builds its vans in St. Louis, Missouri and Windsor, Ontario, in North America, and Austria in Europe. Chrysler Group vans will also soon be produced in Taiwan.

In the end, if and when Volkswagen enters a minivan into the North American market, even if co-developed with Chrysler Group, the automaker needs to remain realistic about how quickly it can ramp up sales to compete with the market leaders. Volkswagen has been misguided before, particularly in believing that its Phaeton luxury sedan would sell greater volumes than it is currently experiencing (hopelessly low), and it would be unreasonable for the brands executive team to believe it could enter an all-new market segment and somehow, miraculously become a dangerous threat to Dodge and Chryslers Caravan and Town & Coutry, respectively, Hondas Odyssey, Toyotas Sienna, GMs Uplander/Montana SV6/Relay/Terraza quadruplets, Mazdas MPV and others. 

Given enough time, however, and VW could build a strong minivan following, especially if the vehicle featured an optional TDI turbodiesel engine.

Now, only time will tell if the DCX-VW joint venture will come to fruition, and then if so, bear fruit worthy of taking on all rival makes.