ST. LOUIS POST-DISPATCH
The Chrysler South Assembly plant in Fenton appears to be out of the running to assemble a VW-branded minivan for Volkswagen AG, according to an industry analyst. Instead, the new vehicle apparently will be built in a sister plant at Windsor, Ontario, when production starts in 2008.
Catherine Madden, senior automotive analyst for market research firm Global Insight, said sources told her that Chrysler chose Windsor as the production site. Madden declined to name her sources, but she said the information came from companies that will be working on the project.
The south plant and the Windsor facility both have been mentioned as a possible production site since the deal was first reported two years ago. Under the deal, dubbed "Project M," Chrysler would build a minivan for VW, which would sell through its dealers in the U.S.
Chrysler declined to comment on whether it had decided to build the vehicle in Windsor. t isn't clear what the decision would mean for the south plant. Chrysler already plans to eliminate a production shift next year at the Fenton plant.
VW spokesman Keith Price said more information about Project M will be revealed in July, including the minivan's name. The minivan is expected to be revealed at the Los Angeles Auto Show in November.
Price did not confirm the assembly location, besides acknowledging that Fenton and Windsor were the natural candidates.
Almost 5,000 employees at the Windsor plant assemble the Dodge Grand Caravan and Chrysler Town & Country minivans, and the Chrysler Pacifica "crossover" vehicle. Meanwhile, about 2,800 employees at the south plant in Fenton assemble the Dodge Caravan, Grand Caravan and Chrysler Town & Country. All of these vehicles share the same platform, as will the VW minivan.
Madden believes Chrysler chose Windsor over Fenton because the company may discontinue the Pacifica next year, leaving the facility with underutilized capacity. Chrysler has said publicly that the Pacifica will remain as part of its future lineup.
If Pacifica isn't part of the lineup, it makes sense to keep the Windsor plant fully utilized, she said.
In general, capacity utilization is one of the prime reasons this collaboration makes sense for Chrysler, said Dave Elshoff, a Chrysler spokesman, though he wouldn't comment on Project M.
Chrysler produced almost 73,000 Pacificas in 2006. By comparison, Chrysler is expected to produce about 45,000 VW-badged minivans for the vehicle's August 2008 showroom debut.
VW hopes to inject the style it has become known for into a new market. But Price said not to expect a complete reincarnation of the minibus.
"The set we're aiming for with this is one says, 'Regardless what driving a minivan says about me, my lifestyle can't be without this vehicle,'" Price said.
As the dominant minivan producer, Chrysler isn't worried about building a vehicle for a new competitor.
It is more about encouraging healthy competition and new life within the segment, said Cathy Graham, spokeswoman for Chrysler's minivan products.
Representatives from both companies also pointed out that this type of cooperation is not unusual for either.
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