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Stalled production could signal end for VW Routan

Rebadged minivan is slumping in sales compared to its Chrysler and Dodge counterparts.

By Douglas Newcomb Dec 13, 2012 1:28PM

From the classic ‘60s Microbus to the funky ‘70s Westfalia, Volkswagen has always been known for its iconic van designs. For this reason, many people wondered why the German automaker formed an alliance with Chrysler in 2006 to rebadge the Town & Country.


Now it appears that VW is ready to pull the plug on the Routan minivan amid dwindling sales. According to Bloomberg, production has been halted for at least five months, and VW is negotiating with Chrysler about the van's future.

 

Fiat, Chrysler’s majority owner, hasn’t built the Routan at its factory in Canada since July.  A Volkswagen spokesman told Bloomberg that "there truly hasn’t been a decision one way or the other” on whether the Routan will continue to be assembled at the plant, while Chrysler declined to comment.

 

Chrysler has built 8,662 Routans this year, which is 38 percent fewer than a year earlier, according to the company’s website. And while sales of the Routan have lagged -- only 9,923 were sold this year through November, representing a 17-percent decline from a year earlier -- the Chrysler Town & Country and the sibling Dodge Grand Caravan have been doing quite well.

 

The Chrysler and Dodge versions continue to enjoy double-digit growth even in a shrinking U.S. minivan market. Town & Country sales climbed 21 percent this year through November, while the Grand Caravan rose 29 percent in the same period. Beside VW badges and a few other cosmetic makeovers, the only genuine difference is that the Routan lacks the fold-flat Stow ‘n Go second-row seat feature available in the domestic brands. (VW also tuned the suspension and steering for a more sporting feel and included aluminum trim inside, but that's about it.)

 

In addition to a cooling minivan market -- sales declined to 3.7 percent of U.S. light-vehicle sales last year compared with 7.9 percent in 2000, according to researcher Autodata Corp. -- Bloomberg speculates that the Routan’s fate could also be influenced by a heated battle of words between VW CEO Martin Winterkorn and Fiat CEO Sergio Marchionne. When the Routan agreement was originally inked, Chrysler was owned by Daimler. The two companies plan to meet in early 2013 to review the agreement, which runs through the 2014 model year.

 

Marchionne has said he’s evaluating whether his company even needs both the Town & Country and Grand Caravan in a shrinking market. Yet with Chrysler's minivans leading the segment -- which the automaker single-handedly created with the first Caravan in 1983 -- Marchionne may be short-sighted. Ford plans to introduce the new Transit Connect Wagon next year, and total minivan sales this year are projected to reach more than a half-million units.


With a 1963 VW Transporter van fetching over $200,000 at a Barrett Jackson auction in 2011, maybe it’s time for Europe’s biggest automaker to trust its own approach to van design. Volkswagen could bring to market one of the van concepts like the Bulli or Microbus that better reflects the company’s heritage. European van fans can at least dream.

 

[Source: Bloomberg]

6Comments
Dec 15, 2012 8:02PM
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People know its a rebadged Chrysler product.  Why pay the extra money for a different grill and interior tweaks? 

Dec 16, 2012 12:35AM
Dec 14, 2012 5:47AM
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You know Insert Random Name, I think you are right.  However, I swore I read at one point that the Chicken Tax was a reason for them not bringing the Transporter over like they have before with the Vanagon and Eurovan.  It may be true in my opinion.  The rules for the Chicken Tax are, like most other US tax laws, quite Byzantine and have changed over the years.  Remember, the Japanese small trucks used to be imported here under a particular loophole.  The truck wasn't considered a truck if it was shipped without its bed, so long as the bed was locally sourced.  That loophole has since been closed.

VW may have just not wanted to deal with the uncertainty that the Chicken Tax rules may change at a future date.

Dec 13, 2012 8:34PM
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Unless I'm missing something, I fail to see how the chicken tax would keep VW from importing a minivan.  Passenger minivans are not considered light trucks.  The Ford Transit Connect is shipped here with seats and windows making it a passenger vehicle and therefore not a light truck.  The seats and windows are then removed to convert the vans into the commercial vehicles (light trucks) that are later sold at dealerships.  It is not subject to the chicken tax.  I know that Ford is getting ready to build a plant over here for the Transit and maybe they already have, but I know they sold the vans that way for a while.  I don't see why VW would be subject to the chicken tax as long as they were importing regular minivans and not commercial vans.
Dec 13, 2012 2:15PM
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"For this reason, many people wondered why the German automaker formed an alliance with in 2006 to rebadge the ."

Chicken tax.

There is no way to produce a funky cool German van in Germany, have it shipped here, pay the Chicken tax, sell it here at a competitive price, and be profitable.

FWIW, I don't like vans but I still think it would be cool if the Transporter somehow managed to find a place on the Chattanooga assembly line.
Dec 14, 2012 6:28AM
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A number of years back VW made a really cool van concept that was very retro yet modern (kind of like the New Beetle at the time).  It was disappointing to hear when VW opted not to put it into production and went with the rebadged Chrysler instead.  It's no surprise to me that it has failed.  VW had a chance to ride a retro wave but decided to play it safe instead.  I can only imagine the number of baby boomers who would have traded in their New Beetles for a retro-styled microbus so they would have the room to transport their grandkids around.  I guess that is what is called an opportunity cost.

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