Volkswagen Caminhoes e Onibus will stick with the radical production format designed by Jose Ignacio "Inaki" Lopez in 1996 when it renews its range of trucks in Brazil in 2006, WardsAuto.com reported.

Seven suppliers build the vehicles and VW workers take care of quality inspections.

The report said VW is spending €400 million ($US490 million) to develop the next generation of 8 to 47-ton (7-43 t) trucks. Last year it led the Brazilian truck market for the first time, with a 34.3% share and 21,006 units.

Production has increased steadily at Resende, climbing last year by 6,095 units to 22,674 trucks and 6,272 bus chassis, WardsAuto noted.

When Lopez designed the "Modular Consortium," he predicted it would be the model for all future automotive plants, but that hasn't happened, the report said.**

WardsAuto noted that, while supplier parks are common today, no other plant operates the same way, in which all seven of the suppliers are profit partners with VW. The suppliers manufacture their own modules, but they don't get paid until VW accepts delivery of a completed vehicle.

Although the concept has not been transferred elsewhere, it works in Resende, Dirk Grosse-Loheide, a purchasing executive at Volkswagen Nutzfahrzeuge, told WardsAuto.

"With volumes of 35,000 units a year, the concept is perfect," he reportedly said, indicating the production goal of the next generation. The plant is considered a 40,000-unit capacity, but last year's production of 28,946 units was the most since 1997, the first full year of production.

WardsAuto said Brazil's commercial vehicle market has grown 12% since 1997, while VW sales have jumped 154%. The Resende plant also exports trucks to Central and South America, Africa and the Middle East, while semi-knocked down kits are additionally being shipped to a new plant opened this year in Mexico, with an assembly capacity of 2,000 units annually.

**Editor's note: A short-lived Chrysler truck-building operation, also in Brazil, somewhat mirrored the VW production concept where suppliers take responsibility for building and installing significant modules.

In 2000, Chrysler opened a plant to build Dakota pickup trucks using complete rolling chassis assembled and supplied by Dana Corporation. But Dakota assembly continued for only a couple of years before the project was axed, due largely to poor sales as a result of Brazil's economic problems at the time.

Dana recently lost out to South Korea's Hyundai Mobis for a similar rolling chassis supply deal at a new Chrysler plant in Toledo, Ohio, that is expected to begin assembling a new Jeep model line in 2006.