Bernd Pischetsrieder, the new boss of the VW Group, has made his first public product decision. He's given the green light to the retro-look Microbus MPV that's been doing the autoshow rounds for a year or two. After the ho-hum sales record of the Beetle, commissioning the Microbus could be another risky nostalgia-fest, especially as it's aimed primarily at a US market. Over there, the 'minivan' is falling out of fashion.

Interestingly, the sizeable Microbus is based on VW's next-generation commercial vehicle platform, which helps cut investment costs. But VW is also planning to build a replacement for the European-market Sharan MPV. It will be part of the new-generation Passat project which is due to appear in autumn 2004.

The new Passat shows how serious the VW Group is about properly differentiating its brands. Today's Passat is based on the Audi A6 and plenty of buyers have figured out that the VW is effectively a budget version of the more upmarket car. But those days are coming to a close. The Mk6 Passat is based on the new PQ46 components set, which is closely-related to the PQ35 matrix developed for the next Golf.

The biggest change is the switch back to a transversely-mounted engine (Audi mounts its engines longways in the nose) and the dropping of Audi's sophisticated four-link front suspension for a simpler McPherson strut design. As well as the claimed improvements in ride and handling, the Passat's bodyshell will be both lighter and stiffer.

It's also slightly bigger than the current car, but much of the gain is in cabin space thanks to the room freed up by the transverse engine. V6 engines (both diesel and petrol) won't fit into the new car, so top-end Passats will get either a VR6 or a new straight-five turbodiesel. We can say goodbye to the unloved W8 engine, too: it's just too wide to fit in the nose.

There'll be three different versions of the new Passat. A saloon (from August 2004), an estate (from December 2005) and an MPV (December 2005). Sources say mainstream Passats will be powered by new direct-injection petrol engines and new turbodiesels.