Report: Volkswagen to Reintroduce U.S. to Phaeton Flagship Luxury Car

By Jacob Brown | July 17, 2013
The power of perception is a funny thing. Then Bentley Continental GT and Flying Spur are the two best-selling models in the history of the British marque, selling at a record pace in spite of their $200,000-plus asking prices. But they were based upon the same mechanicals as the Volkswagen Phaeton, which cost $66,000 to $100,000 in the U.S. and flopped miserably when it was sold here from 2003 to 2006. That doesn't make sense to the executives at Volkswagen in Germany who plan on bringing the Phaeton back to the U.S. "A brand as large as Volkswagen needs a halo project in the upscale segment," CEO Martin Winterkorn said, according to Bloomberg News. "We've seen what happens to brands that don't have that kind of project."
The Phaeton was a hand-built full-size luxury sedan that could be loaded up with a W-12 engine and all the amenities you'd find in an Audi A8, which shares an aluminum version of same chassis. It was a pet project of eccentric auto executive Ferdinand Piech, a member of the Porsche family and a perfectionist whose demanding projects her personally oversaw include the 267-mph Bugatti Veyron, 261-mpg Volkswagen XL1, and the 1998 Volkswagen Passat, which pushed the car upmarket and built a head of momentum to turn Volkswagen into a legitimate premium brand. Unfortunately, Piech resigned his role in 2002 to become an accessory on the board of directors, and some of his vision lost steam. In the U.S., VW has always been linked to cheap cars, like the original Beetle and Golf. But overseas, the Volkswagen Phaeton has been in production continuously since its 2003 introduction, seeing various improvements and selling in numbers good enough to justify its existence, despite its now more than $90,000 base asking price. The car has been compared to the $60,000 Hyundai Equus, which is similar in concept but somehow hasn't been the sales failure the Phaeton was in the U.S. Hyundai built up a brand with cheaper luxury cars before making its way to the flagship luxury car market in the U.S. With the Phaeton, Volkswagen used a version of the midsize Passat equipped with all-wheel drive and a sophisticated W-8 engine to bridge the gap--a gap that went from the Passat's high-water mark of $38,000 to the Phaeton's $66,000. Volkswagen is planning on spending $5 billion over the next three years to roll out the next Phaeton sedan, a new three-row crossover based on its CrossBlue concept, and refine its lineup with variations of existing models like an electric version of the Golf. It had hoped to sell 800,000 cars in the U.S. by 2018, a far stretch above the 615,281 it sold in the U.S. last year. Source: Automotive News (Subscription required)