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Report: Volkswagen Delaying New Phaeton Amid Cutbacks

Motor Trend logo Motor Trend 8/21/2015 Kelly Pleskot
Report: Volkswagen Delaying New Phaeton Amid Cutbacks

Volkswagen will delay plans for a new Phaeton as it works to lower production costs on the expensive sedan, according to a report from Bloomberg.

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Sources familiar with the plan say that the new Phaeton was all ready for production before the automaker decided to make changes. The Phaeton carries a price tag of around $101,000 in Europe, or about three times more than the Passat midsize sedan.

Although VW discontinued the Phaeton for the U.S. in 2006, the flagship model continues to sell in small quantities worldwide. Make that very small quantities. Only 4,000 copies sold last year, dropping 30 percent from the previous year. Compare that to numbers for the Mercedes-Benz S-Class, which sold in excess of 100,000 copies in 2014. MotorTrend Image© Provided by MotorTrend MotorTrend Image

The question of profitability is not unique to the Phaeton, as it currently plagues the entire VW lineup. The VW brand only garnered an operating profit equivalent to 2.7 percent of sales in the first half of the year, or well below the 5 percent at PSA Peugeot Citroen. By 2018, Volkswagen hopes to lift margins to more than 6 percent.

As the lowest-volume model in VW's existing production lineup, the Phaeton has its work cut out for it. A redesign should bring radical changes, considering that the sedan has remained mostly unchanged since its debut in 2002. Is there a chance the posh flagship could return to the U.S. ? Back in 2013, we heard rumors of the sort, but those quickly faded. During the Phaeton's last year in America, only 235 copies were sold here.

Source: Bloomberg

2011-volkswagen-phaeton-front-three-quarter© Provided by MotorTrend 2011-volkswagen-phaeton-front-three-quarter
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