Second Generation VW Phaeton In The Works Despite Slow Sales

Second Generation VW Phaeton In The Works Despite Slow Sales


Volkswagen needs a halo car. That’s the message from the world’s second largest carmaker as it prepares to build a second generation of the Phaeton despite notoriously slow sales.

The Phaeton, which was released in 2002 and competes with the BMW 7-Series, Mercedes S-Class, and corporate cousin Audi A8, is a rare ultra luxury sedan from a non luxury brand. That’s the Phaeton’s main problem. When someone is spending $100,000 on a car to show off their wealth, they want a luxury brand’s emblem on the front, not the same badge you’d find on a Golf diesel with a bunch of ska band bumper stickers on the back.

VW discontinued sales of the Phaeton in the U.S. shortly after its launch, with just three years from 2004-06 available here, but has sold the car continuously since 2002 in Europe. VW plans to bring the Phaeton back to the U.S. for another chance with the second generation.

Sales of the Phaeton have never been good, but when Reuters asked Michael Horn, Volkswagen Group of America President and CEO, about the next generation’s viability in the U.S. he said “that’s a dangerous question. It’s an image bearer with no relevance for volume.”

The question is dangerous for Horn in particular because Volkswagen fired former Audi North America Chief Axel Mees for criticizing the Phaeton project in 2004.