Portugal's Autoeuropa assembly plant and its suppliers are waiting anxiously for Volkswagen group to tell them to prepare for a new model.
The plant in Setubal builds large minivans. The lineup includes the Volkswagen Sharan, its sister, the Seat Alhambra, and the Ford Galaxy, built on a contract basis. All three are mechanically identical.
But Autoeuropa will stop building the Galaxy in March 2006, when Ford replaces it with a new model that will be built in Genk, Belgium. And there is uncertainty over the replacement strategies for both the Sharan and the Alhambra.
"Volkswagen has said it does not want to make identical vehicles off a platform anymore," one industry analyst said. "The Alhambra would need to be quite different from the Sharan."
Suppliers say that Volkswagen's advanced product planning currently includes a 2008 replacement for the Sharan and Alhambra, calling for 80,000 units a year of Sharan and 30,000 Alhambras. A VW spokesman declined to comment, saying only that the current Sharan, which was face-lifted in 2003, is "likely to be built for quite a while."
A factor of uncertainty is also whether the Alhambra large minivan still fits Seat's new sporty image.
Seat says the future of its next-generation Alhambra depends on VW's Sharan decision. Despite a reasonably good sales outlook for the Alhambra, Seat President Andreas Schleef said volume does not justify a completely new Alhambra.
Seat would partner with VW on the minivan replacement, but Schleef accepts that VW may choose an alternative route.
"The market is bringing new solutions, such as crossovers, rather than pure notch hatch or MPVs," he said.
VW group lost the economy-of-scale advantage of the original Autoeuropa joint venture when Ford sold its stake to VW in 1999. The plant has built the Galaxy under contract since then.
Last year, the Portuguese plant won a contract to build a new VW convertible, starting in October.
VW will invest E420 million to develop and build 45,000 to 50,000 cabriolets a year, mainly for the North American market.