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sciguy_0504

Volkswagen to Pull Phaeton

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DETROIT -- Volkswagen AG will pull its pricey Phaeton sedan from the U.S. market in February following the car's mediocre reception from American buyers and the company's attempt to focus more intently on offering affordable products.

Volkswagen of America Inc. spokesman Tony Fouladpour said the Phaeton, which sells for between $68,000 and $104,000, "fell a little bit short of our expectations." The company launched the car in late 2003, but sales have not met initial targets. The company is currently selling only 90 Phaetons a month, Mr. Fouladpour said. The company will continue offering the Phaeton in Europe.

The Phaeton came to the U.S. at a time when Volkswagen was trying to retool its brand's image to better chase high-end luxury brands, including German competitors BMW AG and DaimlerChrysler AG's Mercedes brand. It has struggled in the venture, however, partly because Volkswagen also owns Audi, which sells luxury cars in the U.S. that compete with Volkswagen in some cases.

Volkswagen is now focused on emphasizing its cheaper "core products," Mr. Fouladpour said, including the Jetta and Passat sedans.

"I think what you're seeing here are some hard business decisions being made," the spokesman said.

Mr. Fouladpour said the company is readying a product push that will result in between five and 10 new vehicles populating Volkswagen's U.S. product lineup by the end of the decade.

Through October, Volkswagen sales are off 17% compared to the same period in 2004, according to data-tracking firm Autodata Corp. The brand has struggled despite increasing incentives from traditional levels and offering updated models, even while Japanese competitors continue to consume U.S. market share utilizing relatively minimal discounts and rebates.

Volkswagen, like U.S. competitors General Motors Corp. and Ford Motor Co., is losing money in North American automotive operations while facing high labor and materials costs that are driving up the price of manufacturing in its home market. The company recently has retooled its management ranks, including the naming of Adrian Hallmark to head U.S. operations.

Volkswagen executives concede the company will lose money in North America once again this year, but the auto maker is aiming to restore profitability in the near future. Wolfgang Bernhard, the head of Volkswagen's global operations, recently told U.S. dealers to expect the brand to venture into segments where it currently doesn't compete.

Edit: http://online.wsj.com/article/SB1131982794...e_whats_news_us Edited by sciguy_0504
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A foolish car that failed for obvious reasons.

[post="43114"]<{POST_SNAPBACK}>[/post]


My aunt and uncle have a VW dealership in Oklahoma City. Okay, so it's OKC, not southern California, but my uncle said he didn't take a SINGLE Phaeton on allocation the entire time it was out. In fact, he only had ONE W8 Passat a year when they were out and he had a bitch of a time selling THAT.

In mainstream America, I just don't think that VW has the badge that people are looking for in those price ranges.

(However, he DOES say the new Passat is doing well there...)

He even has a tough time selling Touregs.

Mind you.....their store IS very successful and very profitable (and it's the new VW dealership design) but they do it with used VWs, new Jettas, Golfs, and lower-line Passats, even New Beetles......not Touregs, Phaetons, or higher-line Passats.
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Speaking of which, I finally saw a Passat W8 4Motion on Saturday and this is an area where today marks the sixth Quattroporte I've seen. Fact is simple - if you're spending that much on a VW, why not get the 'real thing' with an Audi? Its not a totally unacceptable argument as you can imagine. Touregs do fairly well here, though we'll see what happens when the Q7 hits the roads.
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Tourag already looks dated. It sits so low to the ground, and has a wide base with narrow top. The front is fine, but from the rear it looks like a fatass. The interior is nice, but a bit "strange" and overall I am much less enthused about it than I was, oh, a year ago. No offense to anyone, but it is also the epitome of a "gay man's SUV."
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I am not surprised to see that VW is pulling the Phaeton. It is a great luxury sedan and the used 2004's with around 10k miles are selling for under $50 grand, which is quite a steal if you can stand driving $50 grand worth of VW. With the Phaeton leaving, the used market should drop even more.
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Well, the engineering aspect wasn't all lost. They've just given the Phaeton W12 a new body, a different interior, two turbos, and viola, the Bentley Flying Spur for twice the price. That car already has an uber-long waiting list. As a piece of engineering, the Phaeton was brilliant. I thought it was let down by its high price, lack of a short wheelbase or VR6 model, and poor marketing. If it were just $10K cheaper, a lot more people would have purchased one.
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I thought the Phaeton was a good car but really...being a VW did kill its chances here.

-Most people have a hard time throwing down $70K for a VW.
-VW reliability is traditionally spotty.
-You're paying Audi prices for VW service (which, by some accounts I've heard, is dismal).
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I strongly doubt even 10% more buyers at $90K vs. $100K.

Car may have been excellent, but it was overpriced for it's badge by $50,000.
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I really liked the Phaeton. I thought it's interior was nicer then the A8. I would have considered one if I had the cash and it had an Audi badge.
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Good riddance to the Phaeton. I hope the Toureg is next to go. It was nothing but a squandering of engineering dollars that should have been used toward VW's core products... Golf, Jetta, Beetle, Passat. They still could have had some money left over to teach their service departments how to keep customers within the VW fold as well, instead of alienating them.

The dealership where I bought my GTI and two Beetles in Maryland had a good service department, I was always treated well there, but I have heard quite a few horror stories about the Lancaster VW service department... something for me to keep in mind as I look forward to seeing the new GTI arrive.
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I agree that the Phaeton was a bad idea on VW's part. Nothing about VW says "ultra-lux limo." Besides, I was under the impression that Volkswagen meant "car for the people," which this truly is not. If they had dropped some of the features and dropped the price significantly (say starting WAY below US$70,000), it may have done better. I don't consider it a waste of engineering costs though. Some good went into the A8 and Flying Spur. Chalk it up as a lesson to stay true to your roots. On the other hand, I like the Touareg, even though VW made the same mistakes here as they did with the Phaeton. It was too luxury oriented and not nearly as affordable as it should have been. It looks nice (albeit somewhat dated when compared with the rest of the lineup), drives well according to reviews I've read, and some good came out of it in the Porsche Cayenne (which, arguably, shouldn't exist either) and the Q7. I'd hate to see it go.
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I strongly doubt even 10% more buyers at $90K vs. $100K.

Car may have been excellent, but it was overpriced for it's badge by $50,000.

[post="43426"]<{POST_SNAPBACK}>[/post]


But it would make a difference at $55K instead of the $65K it is now. That's V8 midsize lux category. The European short wheelbase VR6 version at $45K would've been even better.
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On the other hand, I like the Touareg, even though VW made the same mistakes here as they did with the Phaeton. It was too luxury oriented and not nearly as affordable as it should have been. It looks nice (albeit somewhat dated when compared with the rest of the lineup), drives well according to reviews I've read, and some good came out of it in the Porsche Cayenne (which, arguably, shouldn't exist either) and the Q7. I'd hate to see it go.

[post="43504"]<{POST_SNAPBACK}>[/post]


The Touareg was too overengineered for its own good. No one wants a two-speed transfer case, complicated electronic differentials, and adjustable air suspension for their daily commute. A car-based, Highlander-like crossover would have made more sense.

Oh, and I forgot to mention, the Touareg's interior was crappier than most people expected of a VW/Audi product. Richer materials would have helped. Edited by empowah
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I always thought the Touareg's interior was first rate based on the pictures, at least. It's one of those perceived quality-type things, I guess. It was overengineered. Take out all that crap and it'll shed a few hundred pounds so people can spring for the V6 without it feeling like a stone in water.
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