DaimlerChrysler and Volkswagen are in advanced talks about having Chrysler build minivans to be sold in the US under the VW brand, the Wall Street Journal (WSJ) said, noting that the talks were first reported by German business daily Handelsblatt.

A person familiar with the matter told the WSJ that, although an agreement has not yet been signed, the discussions could conclude when officials of the two companies meet next month at the Frankfurt motor show.

The talks reportedly involve Dieter Zetsche, the Chrysler head who is set to become DaimlerChrysler's chief executive on January 1, and Wolfgang Bernhard, who was Zetsche's No. 1 at Chrysler until he was pushed out of DaimlerChrysler in a boardroom battle last year - since earlier this year, he has headed Volkswagen's VW brand.

The Wall Street Journal noted that Chrysler has reported healthy profits and increased market share in the last few quarters, thanks to several new vehicles that Zetsche and Bernhard helped develop, including the Chrysler Town & Country and Dodge Caravan minivans, while VW, in contrast, is struggling badly in the US, with sales in freefall as a result of high costs, quality problems and an aging and limited product line. The WSJ added that the new Jetta launched this year has gotten off to a slow start and is already being discounted in certain markets while, in July, Bernhard told a group of American VW dealers that a minivan was among a group of 10 new vehicles in development.

VW is interested in having Chrysler build a minivan from the same basic components used in the Town & Country and Caravan, the report said.

According to the Wall Street Journal, it is unclear how a VW model would differ from the two Chrysler minivans, which have second and third-row seats that fold flat into the floor, a feature no other manufacturers offer at this point.

The WSJ added that Chrysler's minivan plant in Windsor, Ontario, is operating at almost full capacity, but it could add a third shift to another plant in St. Louis - doing so could slightly improve Chrysler's margins on its minivans.

Separately, the Reuters news agency said it had been told by two sources familiar with the plan that it had been in the works for some time and that it had been approved in principle by the board of management and supervisory board at DaimlerChrysler in Stuttgart.

Reuters noted that the Chrysler minivans are also built in Austria and will soon be built in Taiwan.

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