There has been renewed speculation about the future of cabriolet vehicle assembler and roof system supplier Karmann.

At the weekend Karmann and Volkswagen denied a Focus news magazine report that VW was interested in taking over Karmann. "There are no plans in this respect whatsoever," a VW spokesperson told the German press agency. A Karmann spokesperson said: "This report is pure speculation."

Focus said that initial discussions between the two companies had taken place and added that VW CEO Martin Winterkorn would be interested in acquiring an additional production location with highly qualified staff at a good price.

Last week Karmann announced that it would cut 1,800 jobs, or around a quarter of its workforce, at its plants in Rheine and Osnabrueck because of a decline in vehicle assembly. Part of the reason for the decline is Audi's decision to cease outsourcing assembly of the A4 convertibe. In addition, Karmann will lose contracts to assemble the Chrysler Crossfire in 2008 and the Mercedes CLK in 2009.

The cuts have been expected for some time. "There are simply no contracts around to assemble complete vehicles," a Karmann spokesperson told dpa-AFX.

Karmann is negotiating for some new assembly contracts. Kia may be interested in sourcing assembly of a new cabriolet from Karmann and a decision about where to build a new Polo cabriolet has still not yet been made.

However, Karmann CEO Peter Harbig said in an interview with Wirtschaftswoche that it even if the company did win a new contract it would take two years to develop the production system and there would still be a period when the plants would not be operational. He is also doubtful whether future contracts will be as high volume as they have been in the past.

Harbig noted that vehicle manufacturers' production systems have become a lot more flexible and it is much easier for them to build niche vehicles in-house.

Harbig told Wirtschaftswoche that he is exploring new business areas for the company, in addition to roof system supply and development work. "We are thinking about alternative drive systems. There are certain areas in which vehicle manufacturers are struggling, such as drivetrain electrification, and they could use our support," said Harbig.

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