Volkswagen released the third Caddy generation in 2003, and in 2005, it received a mildly facelifted version for the entire range, including the passenger version named Caddy Life.
Available in two lengths, the Caddy was developed on a hybrid platform. It shared many of its underpinnings with the Volkswagen Golf MKV and the Touran but with a different rear suspension fit for a light utility vehicle.

With a front fascia that resembled the Touran and a raked windshield continued by the metallic roof, the Caddy looked halfway between a utility vehicle and a minivan. It wasn’t a doll on the base trim levels with its black, unpainted plastic bumper. Yet, it sported body-colored bumpers and fog lights in the upper trim levels, which made the vehicle look more like an MPV than an LCV. For the Caddy Life, the carmaker included a standard rear sliding door on the driver’s side, with an option for a second one on the passenger’s side. At the back, the carmaker offered a choice for either a liftgate or two unequal, side-hinged doors (fridge doors).

Inside, the connection with a utility vehicle was evident in the dashboard’s design. There were plenty of storage areas on the dashboard. Above the windshield, under the ceiling, the carmaker added another storage shelf. All of these were good, but the plastic quality was also from the same LCV segment. In the back, the regular-sized Caddy offered a bench for three passengers while the Caddy Maxi provided room for two extra seats in the trunk area.

Under the hood, the carmaker offered more turbo-diesel versions than gasoline engines and paired them as standard with a five-speed manual gearbox. Later on, it added an automatic gearbox for specific powerplants and an all-wheel-drive version.