HAMBURG, Germany - Volkswagen AG and Porsche AG will join forces to build and sell a luxury sport-utility that may define a new upper limit in the segment.
The off-roader - code-named Colorado - will be based on a new platform being developed by Porsche. VW and Porsche will badge and sell separately styled versions using their own engines.
Sources describe the sport-utility as 'bigger than a Jeep Grand Cherokee.' Top executives of both companies took test drives in a prototype here last week. They were escorted by security guards to shield the car from cameras and the curious.
'It feels like a Panzer, big and powerful,' said a VW executive.
Both versions will go on sale in 2002. Sources say that Porsche's will be priced at more than 150,000 marks, or $85,000, and VW's at under $55,000.
'Our main market will be Europe,' said VW spokesman Klaus Kocks.
Porsche expects that its biggest sport-utility market will be the United States.
'The car targets a very dynamic segment,' said Robert Buechelhofer, Volkswagen board member for sales and marketing and VW's coordinator of the project. 'No segment is growing faster than the off-roader.'
For Porsche, it means a break with the company's sports car tradition.
'It will make us less dependent on sports cars, convertibles and roadsters and create new potential for growth in sales and revenue,' said Chairman Wendelin Wiedeking. 'But it will comply with the high technical and visual standards of Porsche.'
Volkswagen will build both versions. A plant location will be announced in autumn. Sources say it will probably be built at an existing VW plant in Bratislava, Slovakia, or Hanover, Germany.
Annual production volume is expected to be around 100,000: 80,000 for VW and 20,000 for Porsche.
VW will be in charge of production planning and manufacturing. Porsche is leading development of the sport-utility at its Weissach, Germany, research and development center.
Porsche says it plans an all-new engine family for its version. VW will use a 10- or 12-cylinder engine derived from the 5.6-liter W-12 prototype that debuted in a concept car at the Tokyo auto show last fall.
The companies say they will create a new luxury off-roader class rather than compete with existing models. 'It will not be a typical, rectangular sport-utility look,' said a VW insider.
Kocks said the Colorado will offer permanent all-wheel drive and will 'combine the comfort of a sedan with the advantages of an off-roader.'
Porsche plans to invest about $562 million in the project. Volkswagen did not reveal investment plans.
Porsche previously planned to develop and sell a sport-utility jointly with Daimler-Benz. That plan collapsed last year when Daimler insisted on taking an equity stake in Porsche as part of the deal.