Is VW Following in the Footsteps of GM and Chrysler?

The automotive media have their hands full chronicling the slow motion train wreck known as The Big 2.5. But there's another pile-up in progress. Here in the States, Volkswagen of America (VWoA) has transformed itself from a highly profitable purveyor of mesmerizing motors to a struggling brand with an ugly, overpriced and unpopular lineup. To properly parse this fall from automotive grace, let's start with the Phaeton.

The Phaeton was VW's uberluxe sedan. The concept was so brand-defiling that the normally sycophantic buff books felt free to unleash juvenile taunts about the $70k “people's car.” While the VW-badged Mercedes tank killer gave birth to the immensely lucrative Audi A8 and Bentley Continental GT, it was an epic miscalculation that revealed a startling lack of focus.


Read Article

cynic - 2/20/2007 11:03:44 AM

+2 Boost

Poor VW, the "German Engineering" and euro chic maketing ploy can only go so far. You need a well rounded company, that covers all of its bases, in order to suceed in the US.

Larry - 2/20/2007 11:17:30 AM

-2 Boost

Volkswagen is finished, they spend to much time and money focusing on BMW and Mercedes instead of Toyota.

MercBasher - 2/20/2007 2:22:07 PM

+1 Boost

VW can become successful again in the US but it needs a radical overhaul of its dealers, and some new "cheaper" product. Its Rabbit, Jetta and Passat are good cars, but where are (i.) the crossover vehicles (ii.) the small SUVs (iii.) the extensions of the New Beetle concept (iv.) small pick-ups?

louisvuittondon - 2/20/2007 11:38:07 AM

+3 Boost

For what you get VW always seemed overpriced. They make great looking cars, just too costly and not that good of a reliabilty rep.

dav256 - 2/20/2007 12:47:18 PM

+4 Boost

The Phaeton is still a good car.
You could compare it to an A8 and it´s also cheaper than a BMW or Mercedes.
It also has good build-quality, but it´s still a Volkswagen.
And no one is prepared to spend so much money for a VW.
VW owns Audi, and they build cars that can be compared to MB or BMW. Audi is also more prestigious.
So why did they develop this car?

MercBasher - 2/20/2007 2:18:11 PM

0 Boost

When introduced the Phaeton was heavy, slow and thirsty. Combining these features with a relatively high price [actual transactions prices were much lower] and a very uncouth dealer network - meant that the product wasn't right. I don't think it was the VW name that did it in, as opposed to the US dealers and the product performance.

rg12345 - 2/20/2007 1:53:57 PM

0 Boost

The Phaeton is cheaper than any competition (at that inside luxury & comfort). So some people buy it because of that .. 20.000$ cheaper and u still get a lot of space with a lot of stupid things inside to make your life (in the car) better.

S4cabriofoxone - 2/21/2007 11:29:41 PM

+1 Boost

It's only $20K cheaper than an S-Class. The LS430 was less-expensive by over $10,000, and was faster. The Phaeton's calling card was its interior, but you could get a better one in the more stylish, faster, lighter A8 for about $2,000 more.

It was so stupid. Now, almost all of VW's profits come from Audi.

1970toyotamarc - 2/20/2007 4:15:05 PM

+3 Boost

I guess VW is now in TTAC's crosshairs, everyone gets there eventually. They're pretty spot on with this critique though. My only disagreement is in the criticism of the resurrection of the Rabbit name. And it's because of the same argument I have in support of reviving the Taurus name. The vast majority of buyers do not read enthusiast mags or blogs. They see a familiar name and check out the product. No one has awful memories of Rabbits. And most people still think of the 86 Taurus, not the rental spec last gen. It's not like anyone is resurrecting the Corvair, Edsel or Aztek names. I think it will turn out to be one of VW's smartest moves.

S4cabriofoxone - 2/21/2007 11:31:20 PM

+1 Boost

I agree 100%. I had a Rabbit; it was great.

Poor VW... they need to get their act together.

That was probably a primary reason for Audi CEO Martin Winterkorn's promotion to CEO of the VW Group. Maybe he'll work the same magic he's worked with Audi.

dumpsty - 2/20/2007 4:21:20 PM

+1 Boost

I have a lot of respect for the Phaeton. The design is simple (a bit understated), content is numerous, and powertrane exceptional. Though I don't like the price, I would purchase one given the opportunity.

Buicks and Lincolns should mimic the Phaeton. Be an understated quality luxury vehicle with an excellent mix of engine options and interior content. Let Cadillac, Jaguar, Astin Martin, and Audi be the overly-expressed luxury marks that makes the waves.

Lexus - 2/20/2007 4:32:25 PM

0 Boost

Wow! I did not know VW was struggling, I though the big 3 were the only one.

S4cabriofoxone - 2/21/2007 11:33:44 PM

+1 Boost

I think the Phaeton's biggest problem was the A8. For $2K more, you could get the Phaeton's lighter, faster, more stylish, more prestigious, (slightly) more luxurious cabin. And for $5K less, you could get a more prestigious, more reliable Lexus. Although the Lexus wasn't much faster or better-equipped, there wasn't much of a reason to buy the Phaeton over it, besides AWD, and being different. And then there's the A8. It's a vicious circle for the Phaeton.

S4cabriofoxone - 2/21/2007 11:34:08 PM

+1 Boost

*(Slightly) more luxurious COUSIN.

chewy - 2/20/2007 5:07:16 PM

+1 Boost

Yes, VW of America hasn't made the best desicions this decade. But the dollar/euro exchange rate is realy hard to fight. The future isn't as dull as TTAC wants it to be.

Lexus - 2/20/2007 9:24:36 PM

+2 Boost

For the price tag of the VW Phaeton, one could get the Lexus LS460L, MB S-class, A8 or the BMW 745i. Way to over price for VW.

dumpsty - 2/21/2007 10:54:31 AM

+1 Boost

I think VW's way of pricing their vehicles makes the Phaeton cost more than expected. Their pricing is based on levels of room and luxury:

Golf-Beetle-Jetta-Passat-Touareg-Pheaton

dumpsty - 2/21/2007 10:59:48 AM

+2 Boost

I didn't complete my previous statement:

VW has priced the Phaeton higher than the Touareg and it should be the other way around. The Phaeton can still be the flagship luxury car, but the Touareg should have cost more. I think VW didn't want overlapping prices for its vehicles did so by using the current pricing structure.

S4cabriofoxone - 2/21/2007 11:36:49 PM

+1 Boost

I don't agree that the Jetta and Rabbit are overpriced. The Rabbit might be VW's saving grace- for $15K, you get a power driver's seat, heated front seats, CD player, ABS...

It's quite well-equipped, and IMO the most stylish of VW's four mainstream cars. The Passat, while nice with the big rims, isn't so nice otherwise; the New Beetle is sadly in the wrong decade; and the Jetta's chrome grille is hideous.

Lexus - 2/20/2007 10:57:56 PM

0 Boost

I have never like the VW brand because they look very bland and heavy; and the over price thingy too;)

SixxFive - 2/22/2007 12:09:43 AM

+1 Boost

Good article highlighting VW's demise.