The fifth-generation Volkswagen Caddy debuts in Europe as a compact van for hauling goods or people. There's also the new long-wheelbase Caddy Maxi that has room inside for two European-standard pallets.

The new Caddy rides on VW's highly adaptable MQB platform and is available as a cargo van or a passenger model with room for as many as seven people. The latest model has a smoother shape that reduces the drag coefficient to 0.30, rather than the existing generation's 0.33. Despite being a work-focused vehicle, VW offers the van with luxurious amenities like a panoramic sunroof that measures 15.1 square feet (1.4 square meters), LED headlights, and keyless start.

Gallery: Volkswagen Caddy (2020)

The Caddy gets upgraded engines, including diesels with the company's Twindosing system that uses two AdBlue injectors. There are a variety of tunes of a 2.0-litre diesel, and it's available with a six-speed manual or seven-speed dual-clutch automatic. Buyers can select front- or all-wheel-drive layouts. There's also a 1.5-litre turbocharged gasoline engine and a supercharged natural gas powerplant. VW predicts the new powerplants should have fuel economy that's 12 percent better than the previous generation.

Inside, the new Caddy is available with lots of tech. Buyers can specify a fully digital instrument cluster and choose between 6.5- and 10-inch infotainment screens. There's also Travel Assist adaptive cruise control, blind-spot monitoring, and Trailer Assist to make hauling easier.

Unlike other models from Volkswagen Commercial Vehicles, there's a chance that the Caddy might arrive on American roads – but with a Ford badge on the front. VW has a partnership with the Blue Oval to develop a city van, and this product might turn out to be the replacement for the Transit Connect.