VW buys Karmann

Confirming earlier reports, Volkswagen announced on Friday that it will buy assets of German coachbuilder Karmann. Volkswagen also announced that its new Karmann subsidiary will produce at least one new model for the German car maker.

Rumors of VW's interest in Karmann surfaced in October, following shortly after the Osnabrueck, Germany-based coachbuilder's bankruptcy filing. VW and Karmann were said to be far off on a selling price, but the two sides apparently made good. VW failed to release any financial details, but did confirm that it will acquire land, machinery and equipment from Karmann.

VW plans to begin vehicle production at Karmann's Osnabrueck factory by 2011, but has yet to reveal what model will be produced there. VW plans to hire 200 new people at the Osnabrueck facility by 2010, with that number climbing to 1,000 by 2014.

Karmann is best known for producing the VW-based Karmann Ghia, which was produced from 1955 to 1974. Karmann has worked with a number of car makers over the years, including Chrysler, Mercedes-Benz, Porsche, Renault, Ford and BMW. Karmann was last rumored to be developing an all-electric vehicle for VW.