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General Motors Corp. said Wednesday that half of its U.S. vehicle volume will run on ethanol by 2012, just as partner Coskata Inc. is expected to be ramping up ethanol production.

GM will have 11 ethanol-capable vehicles on the market this year and 15 in 2009, said GM North America President Troy Clarke in a speech at the Chicago Auto Show.

Clarke also announced that GM will produce its first four-cylinder ethanol-capable model, the FlexFuel Chevrolet HHR, in 2010.

"We don't only want to respond to the needs of the market; we want to anticipate them," he said.

Clarke also said that Warrenville, Ill.-based Coskata, which announced its partnership with GM in January, has formed an alliance with ethanol plant engineering firm ICM Inc. to build its first plant, which is expected to open in late 2010.

Coskata President and Chief Executive Bill Roe said that the company plans to announce the location of that plant and another plant in the next few weeks, and that construction on both will start this year.

Coskata said it will be able to mass-produce ethanol at the plant for less than $1 a gallon, using a process that converts feedstock, biomass, agricultural waste and municipal solid waste to ethanol.

Clarke said that if GM, Ford Motor Co. and Chrysler LLC meet their promises for the number of ethanol-capable vehicles they will have on the road by 2020, there will be a reduction of 29 billion gallons of fuel annually, or 18 percent of the country's use. GM now has 2.5 million ethanol-capable vehicles on the road and expects to have up to 20 million by 2020, Clarke said.

Also at the auto show

Volkswagen minivan

Determined to increase U.S. sales, Volkswagen AG is entering the minivan market with the Volkswagen Routan, introduced Wednesday at the Chicago Auto Show.

The seven-passenger Routan will be built for Volks- wagen by Chrysler LLC at Chrysler's minivan plant in Windsor, Ontario.

Although the Routan will have a Chrysler frame, engine and transmission, it won't share Chrysler features such as swivel seats. But it will have Volkswagen-engineered steering and suspension. It also will have the German automaker's interior and exterior styling, Volks- wagen said.

The 2009 Routan will go on sale this fall, starting at less than $25,000, the company said.

Return of the Challenger

Chrysler LLC will bring back the Dodge Challenger this year, a remake of the 1970s "muscle car," at a time when U.S. consumers are seeking smaller, more fuel-efficient autos.

The Challenger is a rear-wheel-drive coupe that will vie for buyers against Ford Motor Co.'s Mustang and General Motors Corp.'s next Chevrolet Camaro, due in 2009.

Remaking the Challenger is a gamble for the third-largest U.S. automaker. After riling some enthusiasts with a four-door revival of its Charger in 2005, Chrysler is banking on the Challenger to draw customers paying $3 a gallon for gasoline.

The Challenger gets 18 miles per gallon in highway driving and starts at $38,000.

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