Volkswagen, Porsche Will Co-Produce Sport-Utilities

Volkswagen and Porsche agreed Wednesday to team up to push into the market for four-wheel drive vehicles, one of the fastest-growing segments in the auto industry.

The two German car makers said their supervisory boards have agreed to jointly develop and produce sport-utility vehicles that will reach dealer showrooms in 2002.

VW said it is planning on an initial production run of more than 80,000 vehicles offering a choice of gas or diesel engines, and Porsche plans to produce more than 20,000 vehicles sporting its own line of engines.

Porsche Chief Executive Wendelin Wiedeking said the vehicle will create the potential for new growth at the company, which until now has focused solely on high-performance sports cars.

VW board member Robert Buechelhofer said the new vehicle will also pay off in growth for VW, which makes cars under the Volkswagen, Audi, Skoda and SEAT brands.

The companies will face plenty of competition from established SUVs, such as the Ford Explorer, Chevy Blazer and Chrysler’s Jeep line.

Japanese makers Toyota and Nissan have also had models out for several years, while BMW’s Rover Group has a firm position in the upscale segment with its Land Rover. Even Russia’s Lada offers an SUV.

Volkswagen said it will handle production planning for the vehicles, while Porsche will take the lead in development. They plan to decide on a production location by fall.