Report: Volkswagen Phaeton Returning To U.S.?

Phaeton returning to America?

A new report from Bloomberg suggests that the Volkswagen Phaeton may return to the U.S. market. Although some VW officials say otherwise, the report quotes other VW executives and claims the luxury sedan will debut at the Detroit auto show in January.

The first-generation Volkswagen Phaeton was sold here from 2004 to 2006, but it was never much of a success and was quickly pulled from our market. The pricey luxury car didn’t necessarily fit with the Volkswagen brand image — an Audi-priced executive sedan was in the same showrooms as the Jetta. Moreover, customers who wanted a true luxury ride could instead pick the similar Audi A8. Sales of the Volkswagen Phaeton in America peaked at 1939 units in 2004, before dropping to 820 in 2005 and just 235 in 2006.

Since then, Volkswagen executives have vacillated over whether to bring the Phaeton back to America. Now Bloomberg reports that the car will be shown at the Detroit auto show in January, so that the high-end model can boost Volkswagen’s image in the U.S.

“A brand as large as Volkswagen needs a halo project in the upscale segment,” Volkswagen CEO Martin Winterkorn told Bloomberg. “We’ve seen what happens to brands that don’t have that kind of project.”

However, a Volkswagen representative in the U.S. said the company is unaware of any plans to show a Phaeton concept or production car at the Detroit show. He stressed that the company is focused on building its core models, and that Winterkorn’s comments may have been talking about a long-term goal for Volkswagen of America to eventually add a halo product. He also noted that if the Phaeton were introduced here again, sales would be “not very high.”

“We’re concentrating on the segments that we’re already in,” the Volkswagen representative told us, conceding that, “there’s no reason why we can’t offer more niche vehicles” in the future.

Volkswagen U.S. sales for the first sixth months of this year are down 0.9 percent compared to the first half of 2012. However, the company did not plan any major introductions and sees 2013 as a “consolidation” year. Moreover, year-to-date sales of the Passat are up 1.9 percent after the car had its best ever June sales result. The car is holding its own against a strong suit of rivals: last month, the Volkswagen Passat was the ninth best-selling model in the hotly contested midsize sedan segment.

This generation of the Volkswagen Phaeton was introduced at the 2010 Beijing Motor Show. It is related to the Audi A8, and features expensive touches like traffic sign recognition, a selection of several types of wood trim, a length list of leather upholstery, massaging seats, and more. Prices in Germany start at €70,000, equivalent to $91,900.

Volkswagen is expected to launch a new midsize crossover at the 2014 Detroit auto show, which will likely be based on the CrossBlue concept shown in Detroit last January.

Source: Bloomberg