WOLFSBURG KEEPING HALO CAR DURING EFFORT TO REDUCE NUMBER OF MODELS ACROSS ALL BRANDS
Volkswagen is planning to update the Phaeton sedan, likely for the 2018 model year, despite the first-generation luxury sedan never meeting sales expectations, according to a report from Reuters.
The brainchild of former VW CEO Ferdinand Piech, the Phaeton was conceived at a time when the first-generation Audi A8 was nearing the end of its product cycle. Rather than being a rebodied version of the D2 second-generation Audi A8, the Volkswagen Phaeton featured its own platform and architecture, and offered a lineup of engines ranging from a 3.2-liter V6 to a 6.0-liter W12, in addition to two diesels, one of which was 5.0-liter V10. A high price and buyers' views of the brand's positioning were blamed for poor sales, as the Phaeton was going up against well-optioned BMW 7-series and Mercedes-Benz S-class sedans, both of which were still relatively fresh from redesigns when the Phaeton debuted. The Phaeton was also viewed as creating unneeded competition for the second-generation Audi A8, which debuted in 2003.
Even though the Phaeton received generally favorable reviews when it debuted in North America, the high-priced sedan never managed to crack 2,000 units in a single year of sales in the U.S., with dealers selling just 820 examples in 2005 before Wolfsburg called it quits with the model in 2006.
Despite departing North America, the Phaeton continued to be sold in other markets, and was even given a modest facelift in 2007 and again in 2010. The large sedan continued to be popular in China, alongside just about every other premium European sedan. But the low sales volume and development expenditures still caused VW to reportedly lose 28,000 Euros on each Phaeton sold from 2002 through 2012, according to market analysts who spoke with Reuters. The purpose-built glass-walled Transparent Factory in Dresden also churned out the Bentley Continental GT and its derivatives, closely related to the Phaeton under the skin, which were all money-making cars.
Reuters reports that Volkswagen is planning a more advanced version second-generation Phaeton, amidst group-wide cost-cutting measures. This move has baffled market analysts, who have pointed out that a new Phaeton will continue to cannibalize Audi A8 sales.
"It doesn't make much sense strategically," Stefan Bratzel, head of the Center of Automotive Management, told Reuters. "The business case is equally questionable."
A redesigned Phaeton, expected to debut in 2017 as a 2018 model, is predicted to clash with an efficiency effort designed to improve profit margins that was announced by Volkswagen last year. Volkswagen executives have vowed to reduce the number of unique parts and slow-selling variants across the company's lineup as a part of this effort.
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