Piech had the idea of VAG conquering both BMW and MB - the Phaeton being the luxury cruiser that will unseat the S-Class and the A8 being the sporty luxury saloon that will compete with the 7 Series.

It's actually quite sensible, until you realise that it's a VW competing with MB. If they rebadged the Phaeton as a separate entity of the VAG Group, it may work.

So actually it may not be a matter of "why the Phaeton?" but more of a "not a VW Phaeton".

Roberto, what do you mean by "Quite the contrary actually, it really shows the strong brand awareness in the American market"? Strong brand awareness of the VW brand or the emphasis on the nameplate in general?

Bernhard committed to luxury segment


Wolfsburg (dpa) – The head of the VW-brand, Wolfgang Bernhard, continues to stand by Volkswagen’s controversial luxury segment engagement. VW will not abandon the Phaeton as a “bridgehead in the luxury class”, Bernhard commented to [German news agency] dpa. “The Phaeton will have a successor in due time.” Volkswagen announced on Monday that it will stop offering the Phaeton in the North American market in the summer of 2006. Sales figures were significantly lower than expected. Bernhard said that Volkswagen had not made the decision to end North American Phaeton sales “on short notice.” “In the North American market, the VW brand must return to its former vigor as fast as possible.” That applies to volume and margin. To achieve this goal, VW will now concentrate on the marketing of its two main products for the U.S. market, Jetta and Passat. “Beyond that, we are developing new models at great pace which aim at the preferences of the North American customers.”

Within the [Volkswagen] Group, the appropriations for capital expenditures are limited, Bernhard said. VW must reduce the losses in North America “as fast as possible.” The new emissions regulations would have tied up a significant amount of capital to continue the sale of the Phaeton in the U.S. beyond 2006. “ We would have had to completely reengineer the U.S. engine lineup for the vehicle. Given the challenging sales situation in the U.S. and the Dollar exchange rate, such an expenditure was not justifiable.”

Total U.S. sales of the VW brand declined by 17 percent to 180,000 units for the period January to October 2005. Phaeton sales dropped to only 686 units for the first ten months [of 2005] – a minus of 50 percent. VW anticipates a loss of close to a billion dollars for the U.S. business in FY 2005.
Bernhard elaborated that the situation for the Phaeton is “completely different” in Western Europe. Here, the sales of the car have continuously improved over the last months. In the first eight months of 2005, Phaeton sales jumped by 50 percent. In Germany, segmental market share [of the Phaeton] reached 18 percent in the same period. Considering the strong competition in the luxury segment, this is a “very good development.” The Phaeton was introduced in 2002. The VW luxury segment also includes Bentley and Bugatti.

Source: VWvortex

It just depends on whether they think that investment is worth it. Come on, VW - there's nothing wrong with being a top-notch maker of reasonably sized and affordable cars. Let Audi do the luxury stuff; where's the logic in making several VAG brands jacks of all trades and masters of none?

let audi do the luxury stuff?isnt that the job for mercedes?

Personally I'm glad it's going. The Phaeton wasn't merely a bigger more expensive Passat...it was a couple price niches up from what VW buyers
expect to pay...and vice-versa...what people have come to expect a VW to be. If the Phaeton had been more closely priced to the Passat-
an upscale version, I think it would've had a better chance in the marketplace.
If I had the money available right now I'd get one...it's an instant classic-
a classic example of bureaucratic arrogance.

I'm not sure if you guys really hear about VW's situation here in the U.S., but it is pretty bad at the moment. The above post does touch on it, but the getting rid of the Phaeton is the least of VW's worries in the U.S.

The new Jetta has gotten a luke-warm response, mainly because of Toyota Corolla-like styling and a high price. Now the Passat has seemingly been better recieved, but both it and the Jetta have just had VW-subsidized leases slapped on them because in Oct sales of all VW cars fell dramatically, that was on top of an already grim year.

VWOA is wise to get ride of the Phaeton over here and concentrate on their traditional cars because here in the U.S. VW is having a hell of a time trying to sell cars.

VW's biggest problem is price, something they really can't do anything about in such incentive-addicted market. The new Passat is without a doubt the best family sedan on the market, the 4-cylinder verson has a base price that is too close to V6 sedans from competitiors and the V6 Passat's base price on the high side too, but with options it can go to 40K!

M

live4mercedes, luxury isn't all Mercedes. Audi & BMW both build awesome, spectacular machines that are just as good or even better than what Mercedes manufactures.

I recently moved and there's a W12 parked right across from my parking spot.., I must say that it's a really beautiful and luxurious car... a a real classic beauty.

That said, I'm not that sad to hear it won't be made anymore simply because I don't think VW has any business in that car segment. VW has enough problems in their regular segments to try and compete in segments it already has products placed (A8).

I didn't get any pics, but I rode along side one of these earlier tonight. I love this car and I miss it a lot. Maybe I'll get a used one in a couple of years for next to nothing!

M