Volkswagen has decided not to go ahead with plans to assemble a pick-up for the European market at its Hannover commercial vehicle plant.

According to Automobilwoche, Volkwagen has redone some analysis that shows that recent fuel price rises have completely changed the European market and there is no demand for a heavy vehicle with a large loading area.

The pick-up will still be produced in Argentina, where the market is growing. Around EUR233m has been invested in the Pacheco assembly plant in Buenos Aires to produce the pick-up from 2009. Annual production should reach around 90,000 units, with a significant proportion destined for export, mainly to Brazil.

Automobilwoche also noted that the new Volkswagen pick-up will not be sold in the US. Although the US is traditionally a big market for pick-ups, customers there are now looking for smaller, more fuel-efficient vehicles.

According to an earlier local press report, 700 jobs at the Hannover plant (of a total of 13,000) would be dependent on the pick-up assembly operation from 2010. As a result the company is looking for replacement work.

Volkswagen decided to enter the pick-up market in 2005. The then chief executive, Bernd Pischetsrieder, said at the time that there could also be a big market in Europe for pick-ups. During that year VW decided not to go ahead with plans to build the 'Microbus' in Hannover.