Phaeton 2006 will be the last year for NAR Phaeton sales.

[Alx]

The day I see an A8 chromed out in a rap video I'll have to kill someone.

Get your guns out...

http://www.germancarforum.com/showthread.php?t=24&page=2&pp=10

 

[Carbon]

Get your guns out...

http://www.germancarforum.com/showthread.php?t=24&page=2&pp=10

I don't have much of a problem with that one because it's inspired by an earlier A8 show car that Audi themselves made. It also doesn't have big ugly wheels and still isn't in a rap video.

 

[Alx]

i forgot Carbon, the rap video was a pre-requisite.

 

[Merc1]

There have been some valid points made about why the Phaeton failed in the U.S. market - status, image, brand name etc. are all valid. However VW of America did little or nothing to promote the car. Most people didn't even know the Phaeton existed, combined with VW's lousy U.S. dealer setup and poof-->failure. VW's U.S. dealer operation can't get service right on Jettas and Passats so there was no way in hell they were going to be able to sell and service the Phaeton. Mercedes, BMW, Jaguar, and Lexus are all luxury car dealerships and they treat their customer as such.

Nobody in the U.S. media has said that big veedub was a bad car, only that it didn't fit the VW image and that it didn't have a proper dealer setup to support it.

As much as I liked the car, we all know it didn't make sense when VW already has a luxury arm - Audi. VW was trying to have their cake and eat it too, doesn't work that way. Especially in the U.S. market.

M

 

[Mr. M]

Well for all you know, the Phaeton could one day in the future be a vintage automobile - for the most luxurious VW ever built that nobody wanted. Till then, the Phaeton faces a dark, danky future. Maybe once they introduce the 4-door coupe that's situated between the Passat's and the Phaeton's price, it would iron out some issues of brand recognition.

It would take time and effort on VW's part, without doubt.

 

[SDNR]

ThereNobody in the U.S. medial has said that big veedub was a bad car, only that it didn't fit the VW image and that it didn't have a proper dealer setup to support it.

As much as I liked the car, we all know it didn't make sense when VW already has a luxury arm - Audi. VW was trying to have their cake and eat it too, doesn't work that way. Especially in the U.S. market. M

You are 100% correct there Merc1 - I have always felt the Phaeton was, in essence, a stupid idea - it is a great car though, but you're right, it was a completely unnecessary model given VAG already offer the A8.

Although the Phaeton will sell better in Europe and perhaps parts of Asia relatively better than in the US, this is no reflection of any kind of "lack of sophistication" of the American market. Quite the contrary actually, it really shows the strong brand awareness in the American market - VW is not known to be a luxury car maker - there really is no shame in making excellent small and relatively affordable cars - even their small cars generally aren't all that cheap though.

 

[Osnabrueck]

VW Pulls Phaeton from US Market

Add insult to injury - The upcoming Lexus LS has a mug that's a wholesale rip-off of the Phaeton. American buyers will be none the wiser.

By JOHN D. STOLL in Detroit and CHRISTOPH RAUWALD and STEPHEN POWER in Frankfurt
?Staff Reporters of THE WALL STREET JOURNAL November 15, 2005;*Page*A8
Volkswagen AG said Monday it will pull its pricey Phaeton sedan from the U.S. market in February, delivering a new blow to the chairman of its supervisory board, Ferdinand Piech.

Mr. Piech championed the development of the Phaeton while he was chief executive, from 1993 to 2002, and he envisioned the car as the centerpiece of an ambitious strategy to turn VW into more of a luxury-car maker.

Mr. Piech's "strategy of moving the brand more upmarket was flawed," said Stephen Cheetham, an analyst with Sanford C. Bernstein Ltd. in London. The withdrawal of the Phaeton from the U.S. less than three years after its launch "is a tacit admission that that strategy is in disarray."

The decision to pull the Phaeton out of the U.S., the world's largest auto market, is the latest sign of trouble for Volkswagen's North American business, which racked up €818 million ($960 million) in losses during the first nine months of the year.

Volkswagen of America Inc. spokesman Tony Fouladpour said the Phaeton, which sells for $68,000 to $104,000 and was launched in the U.S. in 2003, "fell a little bit short of our expectations."

The Phaeton's demise in the U.S. comes as Mr. Piech confronts criticism for apparent conflicts of interest. He recently backed a purchase of a 20% stake in Volkswagen by Porsche AG, a company controlled by Mr. Piech's family. He is the grandson of Ferdinand Porsche, founder of the sports-car maker.

Through his family, he also owns part of Porsche Holding Salzburg, an Austrian company that distributes vehicles made by Volkswagen's VW, Audi, Skoda and Seat brands in Eastern Europe and elsewhere. Mr. Piech couldn't be reached for comment.

Last month, after the release of a VW-commissioned report by J.P. Morgan Chase & Co. on the conflict-of-interest question regarding the Porsche stake, other members of the supervisory board -- the German equivalent of a U.S. board of directors -- pressured Mr. Piech to resign. But labor representatives on the board backed Mr. Piech, and he kept his seat.

Although VW officials have said Volkswagen plans to continue working on a new version of the Phaeton, Mr. Cheetham said the economics of building the Phaeton "look more dubious" if Volkswagen takes the car out of the U.S. market.

The company spent almost €1 billion to build the factory where the car is made in Dresden, Germany, a glass-and-steel edifice so impressive that the town's opera company once used it when the local opera house was flooded. The "glass factory," as it is known, was another pet project of Mr. Piech's, but today it operates at a fraction of its potential capacity.

Last year, Volkswagen sold about 7,000 Phaetons world-wide. Originally, VW had expected to sell approximately 20,000 a year and to compete with the world's most established luxury sedans, such as DaimlerChrysler AG's Mercedes S-Class, BMW AG's 7-Series and the Audi A8 of Volkswagen's own luxury unit, Audi AG.

With its sales down sharply in the U.S. and China, Volkswagen is under pressure to reduce costs in Germany, where some of its plants are operating at capacity levels of about 70%, well below the 90% threshold many analysts consider necessary for profitability.

VW's focus on luxury models like the Phaeton has left it with a product line lacking the kind of minivans, compact sport-utility vehicles and convertibles that have become hot sellers in the U.S.

 

[Snake Vargas]

Re: VW Pulls Phaeton from US Market

Similar topic here:

http://www.germancarforum.com/showthread.php?t=1053

But it could somehow become a collector's item in America.. though unlikely.

 

[Osnabrueck]

Re: VW Pulls Phaeton from US Market

Whoops! I shouldn't post this early in the morning.

 

[Mr. M]

Re: VW Pulls Phaeton from US Market

But in perspective, 7000 Phaetons sold for a new and unknown luxury model from VW isn't half as bad.

They need time, good dealerships and marketing. To change people's perspectives.

Without a doubt the car, based on its merits, can and will do well like how Audi is slowly being accepted today in the modern world as a competitor to MB and BMW.

 

[Mr. M]

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?

 

[Mr. M]

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

 

[Snake Vargas]

Re: VW Pulls Phaeton from US Market

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?

 

[live4mercedes]

Re: VW Pulls Phaeton from US Market

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?

 

[Brookside]

Re: VW Pulls Phaeton from US Market

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.

 

[Merc1]

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

 

[Mr. M]

Re: VW Pulls Phaeton from US Market

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.

 

[siko]

Re: VW Pulls Phaeton from US Market

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).

 

[Merc1]

Re: VW Pulls Phaeton from US Market

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