Jump to content
William Maley

VW News: Volkswagen Still Set On Loss-Leader Phaeton

Recommended Posts

Trying to figure out the logic of Volkswagen concerning the next-generation Phaeton is a very difficult task. The German automaker loses 28,000 euros (about $31,598) on every Phaeton built. Also the automaker has announced a cost-cutting plan that a plan to save 5 billion euros ($5.7 billion) annually in the coming years. Yet, Reuters is reporting that Volkswagen is going forward with the next-generation Phaeton due sometime in 2017 or 2018.

"Economically speaking, it's the most irrational project. Piech and Winterkorn simply cannot let go of their fondness for luxury products,"said Evercore ISI analyst Arndt Ellinghorst.

How irrational are we talking about? Analysts say that next-generation Phaeton using the MLB platform could cost as much as 650 million euros (about $737 million). Even some Volkswagen executives are wondering why the Phaeton is still around.

"That's a dangerous question. It's an image bearer with no relevance for volume," said Volkswagen's U.S. Head Michael Horn.

Source: Reuters

Click here to view the article

Share this post


Link to post
Share on other sites

But it will come back to haunt them. This will be a money pit that will cost a few men their jobs in the long haul.

Share this post


Link to post
Share on other sites

No point to this car, they need to let it die already.  They thin a VW can compete with an S-class?  That is a waste of $737 million.  They could make it compete with the Equus or K900, but that isn't enough sales volume, and no point to do that.  If someone wants a $75k luxury car from VW, they can buy an A8.

 

The other problem is a Passat starts at $22k and then the Phaeton is one step up at $75k?  A $50k price difference and they look the same!  I think VW could use a sedan larger than the Passat, priced in the $33-43k range, as more of an Azera, Maxima, Impala and LaCrosse competitor.  But by no means should they make a $75k sedan.  That would be like Chevy making a $75k full size luxury sedan to compete with Cadillac.

Share this post


Link to post
Share on other sites

If NOTHING "competed" with the S-class, there would be no A8, no 750i, no Quatroporte, no XJ... and no other sedan in the general price range.

 

Yet, there are.

Share this post


Link to post
Share on other sites

The Quatroporte and XJ are barely competing.  Really they should just give up.  Since the A8 platform gets used for Bentley too, they might as well take the $737 million for the Phaeton and put it into the A8, maybe they can sort of catch up to the S-class.  Because now Mercedes is coming for Bentley too with the Maybach S600.   VW should have a $30-40k sedan above the Passat as their Maxima/Avalon competitor, sort of a poor man's Audi A6 I guess.

Share this post


Link to post
Share on other sites

So should mercedes "give up" on super high end option trims because "no one buys them"??

 

Maybach is saddled with the stink of recent failure, I don't see it being a draw of any measurable means. Bringing it back into the 'MB' brand allows MB to hide whatever dismal take rates it manages, and cutting it's price in HALF at least gives it a fighting chance. I just hope MB isn't looking to previous well-heeled maybach buyers to forget the 3rd degree burning they took in hindsight. Mercedes should "give up" on a 'Maybach'. Again.

 

 

Fact remains; these other models in the same price tier are there because some consumers obviously don't gravitate to the 'Hello Kitty' of luxury sedans.

Share this post


Link to post
Share on other sites

S-Class is OVER RATED! Being in a few I have yet to see why they charge so much as it does not register with me but then I guess not being part of the billionaire class I cannot fathom the badge snob of it either.

Share this post


Link to post
Share on other sites

S-Class is OVER RATED! Being in a few I have yet to see why they charge so much as it does not register with me but then I guess not being part of the billionaire class I cannot fathom the badge snob of it either.

S-class has been the best car in the world for the past 30 years.  I don't think the best in the world can be overrated.  Few cars have had that long a run at the top of their class, 3-series is probably the only other one.  The Phaeton can't even compete with the A8, there is no point in VW making it.  They should put those resources into the Jetta and Passat and get them more competitive.

Share this post


Link to post
Share on other sites

 

S-Class is OVER RATED! Being in a few I have yet to see why they charge so much as it does not register with me but then I guess not being part of the billionaire class I cannot fathom the badge snob of it either.

S-class has been the best car in the world for the past 30 years.  I don't think the best in the world can be overrated.  Few cars have had that long a run at the top of their class, 3-series is probably the only other one.  The Phaeton can't even compete with the A8, there is no point in VW making it.  They should put those resources into the Jetta and Passat and get them more competitive.

 

 

Says who and on what metrics?

Share this post


Link to post
Share on other sites

 

S-Class is OVER RATED! Being in a few I have yet to see why they charge so much as it does not register with me but then I guess not being part of the billionaire class I cannot fathom the badge snob of it either.

S-class has been the best car in the world for the past 30 years.  I don't think the best in the world can be overrated.  Few cars have had that long a run at the top of their class, 3-series is probably the only other one.  The Phaeton can't even compete with the A8, there is no point in VW making it.  They should put those resources into the Jetta and Passat and get them more competitive.

 

Considering how MB whores out the S class to the Taxi Fleets of Europe and has to so heavily discount them to sell here, I would like to see metrics that show this is truly the worlds best selling luxury auto besides just pointing to sales numbers.

 

If it is such the best car you speak of, then why do you not see S class auto's past 5 to 10 years on the roads? Is it possibly due to them not being able to last? Give more than just pointing at Sales numbers please.

Share this post


Link to post
Share on other sites

 

S-Class is OVER RATED! Being in a few I have yet to see why they charge so much as it does not register with me but then I guess not being part of the billionaire class I cannot fathom the badge snob of it either.

S-class has been the best car in the world for the past 30 years.  I don't think the best in the world can be overrated.  Few cars have had that long a run at the top of their class, 3-series is probably the only other one.  The Phaeton can't even compete with the A8, there is no point in VW making it.  They should put those resources into the Jetta and Passat and get them more competitive.

 

 

You know who's had a car at the top of their class longer... much much longer? Chevrolet. 

The Phaeton is a Genesis/K900/Lexus LS competitor. A loaded long wheel base Phaeton is about $100k, so that gets just above base price on the S-Class. 

Share this post


Link to post
Share on other sites

 

 

S-Class is OVER RATED! Being in a few I have yet to see why they charge so much as it does not register with me but then I guess not being part of the billionaire class I cannot fathom the badge snob of it either.

S-class has been the best car in the world for the past 30 years.  I don't think the best in the world can be overrated.  Few cars have had that long a run at the top of their class, 3-series is probably the only other one.  The Phaeton can't even compete with the A8, there is no point in VW making it.  They should put those resources into the Jetta and Passat and get them more competitive.

 

Considering how MB whores out the S class to the Taxi Fleets of Europe and has to so heavily discount them to sell here, I would like to see metrics that show this is truly the worlds best selling luxury auto besides just pointing to sales numbers.

 

If it is such the best car you speak of, then why do you not see S class auto's past 5 to 10 years on the roads? Is it possibly due to them not being able to last? Give more than just pointing at Sales numbers please.

 

It is a major financial liability to own and operate an S-Class outside of its warranty. That's why they have such terrible depreciation. People who make the mistake of buying an S-Class rather than taking one of the MB Subsidized leases can look forward to losing an entire E-Class in depreciation in just 36 months. Sounds like a great car to me. 

  • Upvote 1

Share this post


Link to post
Share on other sites

The problem for the current Phaeton is that it has not been updated significantly since it was first on sale here in 2004. One would find it difficult to tell the difference between a 2004 interior and a 2015 interior.

 

I'd imagine that with the next Phaeton, VW is planning some major cost cutting and parts sharing that will push the car closer to if not inside the black.   Might even see a bit of a price drop too.  Dropping the price to match the Koreans just might get some more people to buy.... yes it is a "People's" brand, but it is slightly more trusted than Kia/Hyundai.

Share this post


Link to post
Share on other sites

What I liked about the previous Phaeton was the principal behind its build. Pieche wanted the best without compromise to shove in face of BMW and MB and even Audi. The car did grueling testing in extreme weathers at high speeds to check reliability. Too bad badge snobs beat it down.

 

I wouldn't mind owning one of the W12s sometime as you can find a good piece for $~15k. To me it was better than the S Class then, which was full of compromises.

Share this post


Link to post
Share on other sites

Sadly for the Phaeton the interior space was just too little. A big person like me could never get comfortable in the front seat let alone sit in the back seat.

 

Plus this auto should be competing against Buick, Acura, Lincoln, etc.

Share this post


Link to post
Share on other sites

Sadly for the Phaeton the interior space was just too little. A big person like me could never get comfortable in the front seat let alone sit in the back seat.

 

Plus this auto should be competing against Buick, Acura, Lincoln, etc.

 

oookay... so the Phaeton is a fairly huge car as sedans go these days. The rear seat is ginormous....   You're simply going to have to start building your own car or have your legs amputated if you can't get into the back of a Phaeton....

Share this post


Link to post
Share on other sites

S-class has been the best car in the world for the past 30 years.

That is hilarious. 2015 – 30 = 1985. Here's the interior of an '85 s-class :

 

the-mercedes-benz-s-class-of-the-w-126-s

 

Giant black rubber steering wheel, mouse fur upholstery, horrible unpainted plastics, it just REEKS of cheapness. Mercedes interiors in the '80s were horrible, horrible, horrible; SL is in a dead heat for the barrel bottom here, too. 

 

It was only by benchmarking Cadillac in this era that MB was able to move ahead. You're a full decade optimistic on this claim.

Share this post


Link to post
Share on other sites

Phaeton did post good rear compartment numbers.

Legroom- frt: 41.7, rr: 43.1 for a total of 84.8. Not as good as my B-59 coupe, but close. ;)

 

The product planners who green lit a car squarely in the upper audi range clearly didn't know what they were doing. 

Ego has probably had a higher cost in business than most other causes.

Share this post


Link to post
Share on other sites

 

S-class has been the best car in the world for the past 30 years.

That is hilarious. 2015 – 30 = 1985. Here's the interior of an '85 s-class :

 

the-mercedes-benz-s-class-of-the-w-126-s

 

Giant black rubber steering wheel, mouse fur upholstery, horrible unpainted plastics, it just REEKS of cheapness. Mercedes interiors in the '80s were horrible, horrible, horrible; SL is in a dead heat for the barrel bottom here, too. 

 

It was only by benchmarking Cadillac in this era that MB was able to move ahead. You're a full decade optimistic on this claim.

 

 

 

Oooh boy! 4-Speed dial fan control! Completely unmarked vent control (I bet it's cable operated too!) Giant toggle switches from JC Whitney and a Honda Accord gauge cluster.

 
For reference, here was what Lincoln was doing in 1985:
 

post-51-0-09068100-1423868412_thumb.jpg

 

Technically this is an '83, but the only difference is the steering column and wheel. 

So here's a second view 

post-51-0-64493200-1423868554_thumb.jpg

 

Fully Automatic, push button climate control. Set it and forget it... no twiddling with dials to adjust fan speed. This was standard, not optional like on the Benz and controled fan speed and temperature rather than just temperature like on the Benz.

Cruise control on the steering wheel (something Benz STILL hasn't done)

It's a full digital dash plus a rather extensive trip computer with real time fuel economy, distance to empty, Estimated time of arrival, gallons of fuel used, gallons of fuel left (yes, it actually gave you a number rather than E - F)

Automatic headlamps AND high beams.

.... and a much cleaner overall look.

This Continental had roughly the same horsepower and torque in base form as the optional upgrade 5.0 in the Benz..... in a fantastic bit of irony, the Continental was pushrod while the Benz was SOHC. 

 

Then there is the Mark VII

 

post-51-0-22784600-1423869303_thumb.jpg

post-51-0-86372200-1423869303_thumb.jpg

 

Bit of a sportier flare, again it is actually computerized.

 

Both Lincolns had an early form of traction control and skid control. 

 

Then there's the Eldorado and Seville.  These were less than a year from being redesigned into a new body, but here they are with digital dashboard, trip computers, automatic headlamps/high beams and fully automatic push button climate control.

 

post-51-0-52031600-1423870335_thumb.jpg

Share this post


Link to post
Share on other sites

The W126 S-class is the best selling S-class ever, with over 892,000 sold.  That car really expanded the global presence of Mercedes, probably more than any other car in their history.  You could make a claim that the W116 S-class was the best car in the world, especially with the 6.9 V8.  That was mid 70s, so that puts it on a 40 year run as the top luxury car in the world.

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoticons maximum are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.




  • Today's Birthdays

  • Similar Content

    • By William Maley
      Volkswagen has dropped some new sketches of the upcoming 2019 Jetta that will debut next month at the Detroit Auto Show.
      Compared to the current model, the redesigned Jetta looks to be more upscale. The front end comes with a hexagonal grille shape, sculpted hood, and angled headlights. Along the side is a pronounced character line and lowered roofline. The back comes with an integrated spoiler for the trunk and a dual exhaust system with chrome accents - likely on higher trims. Inside, the Jetta looks to be somewhat luxurious with an improved design for the dash, optional digital instrument cluster, and a large infotainment screen that is angled to the driver.
      Power will come from a turbocharged 1.4L four-cylinder producing 150 horsepower - the same engine found in the current Jetta. Transmission choices include a six-speed manual or an eight-speed automatic.
      Source: Volkswagen
       

      View full article
    • By William Maley
      Volkswagen has dropped some new sketches of the upcoming 2019 Jetta that will debut next month at the Detroit Auto Show.
      Compared to the current model, the redesigned Jetta looks to be more upscale. The front end comes with a hexagonal grille shape, sculpted hood, and angled headlights. Along the side is a pronounced character line and lowered roofline. The back comes with an integrated spoiler for the trunk and a dual exhaust system with chrome accents - likely on higher trims. Inside, the Jetta looks to be somewhat luxurious with an improved design for the dash, optional digital instrument cluster, and a large infotainment screen that is angled to the driver.
      Power will come from a turbocharged 1.4L four-cylinder producing 150 horsepower - the same engine found in the current Jetta. Transmission choices include a six-speed manual or an eight-speed automatic.
      Source: Volkswagen
       
    • By William Maley
      Porsche seems to be going ahead on electrifying their iconic 911 sports car. Speaking with Automotive News, Porsche CEO Oliver Blume revealed that the company is working on a plug-in hybrid variant of the next-generation 911. 
      "It will be very important for the 911 to have a plug-in hybrid," said Blume.
      The decision on whether to move forward with the project hasn't received final approval, but Blume said  it's "my opinion that we will go for it." 
      Blume's comments help clear the confusing mess of rumors from the past few years which said one minute that they were considering it and the next minute being taken off the table. Earlier this year, plans were dropped due to weight concerns of the batteries.
      The next-generation 911's platform has been designed to accommodate the batteries needed for the plug-in hybrid system. Currently, Porsche is planning to launch the plug-in hybrid 911 during midcycle refresh of the next-generation 911. With the launch of the next-generation 911 expected to take place in 2019, this could mean the 911 plug-in hybrid will debut in 2023.
      Why is Porsche waiting until the midcycle refresh? Blume said this would allow the company to get batteries that deliver more power and range.
      Source: Automotive News (Subscription Required)

      View full article
    • By William Maley
      Porsche seems to be going ahead on electrifying their iconic 911 sports car. Speaking with Automotive News, Porsche CEO Oliver Blume revealed that the company is working on a plug-in hybrid variant of the next-generation 911. 
      "It will be very important for the 911 to have a plug-in hybrid," said Blume.
      The decision on whether to move forward with the project hasn't received final approval, but Blume said  it's "my opinion that we will go for it." 
      Blume's comments help clear the confusing mess of rumors from the past few years which said one minute that they were considering it and the next minute being taken off the table. Earlier this year, plans were dropped due to weight concerns of the batteries.
      The next-generation 911's platform has been designed to accommodate the batteries needed for the plug-in hybrid system. Currently, Porsche is planning to launch the plug-in hybrid 911 during midcycle refresh of the next-generation 911. With the launch of the next-generation 911 expected to take place in 2019, this could mean the 911 plug-in hybrid will debut in 2023.
      Why is Porsche waiting until the midcycle refresh? Blume said this would allow the company to get batteries that deliver more power and range.
      Source: Automotive News (Subscription Required)
    • By William Maley
      Diesel is quite popular in Europe partly due to subsidies provided by governments - in this case, a lower tax rate on diesel fuel than gasoline. The thinking at the time was diesel engines burn their fuel more efficiently than gas engines, thus they contribute less to global warming. But as the Volkswagen diesel emission scandal would reveal, diesel vehicles aren't that much cleaner, producing more nitrogen oxide emissions than their gas counterparts. Now, one CEO from a German automaker is saying that maybe it is time to end the subsidies.
      “We should question the logic and purpose of diesel subsidies. The money can be invested more sensibly to promote more environmentally friendly technologies,” said Volkswagen CEO Matthias Müller to German paper Handelsblatt.
      This is quite the surprise as Volkswagen along with other German automakers said diesel still had a future due to new pollution reduction technologies. Also, Volkswagen did very well with the sales of diesel models. But with the dark cloud of the diesel emission scandal, Müller likely sees the writing on the wall and wants to get out ahead.
      Müller went on to say that he was in favor of banning older diesel vehicles from city centers. But he said that newer diesel vehicles should be exempt from the bans as they meet "stricter standards on nitrogen oxide emissions".
      Source: Handelsblatt via New York Times
  • My Clubs

  • Who's Online (See full list)

About us

CheersandGears.com - Founded 2001

We  Cars

Get in touch

Follow us

Recent tweets

facebook

×