Why The Volkswagen Phaeton Failed In The United States


The term Volkswagen means “people’s car” in
German, and that is mostly what the brand sells stylish, well engineered
cars that are still relatively affordable. Volkswagen usually leaves the task of
selling pricey sports cars, luxury rides and super cars to its sister
brands such as Porsche, Audi and Bugatti. But there was at least one time Volkswagen
tried to elbow its way into the luxury car market and it failed
miserably, especially in the United States. The Volkswagen Phaeton was, by most accounts,
a marvelous car, but it was expensive. In 2004, pricing in the U.S. started at sixty four thousand six
hundred dollars for the version with the eight cylinder engine. A 12 cylinder version started at
around eighty three thousand five hundred fifteen dollars. It was widely reported to be a pet
project of Ferdinand Piëch, a scion of Volkswagen’s founding Porsche Piëch family
and a longtime Volkswagen Group executive who has been regarded as
very much a larger than life personality in the automotive world. Piëch had held key roles at Porsche
and Audi and over the years demonstrated a taste for high
quality and high priced cars. He was largely behind Volkswagen’s acquisition
of French super car maker Bugatti, British luxury brand Bentley and
the Italian super car maker Lamborghini. With the fate on, Piëch wanted to
design a vehicle that would be nothing less than the best car in the world,
and he wanted it to bear the Volkswagen badge. The Phaeton was meant to lift Volkswagen
to the level of luxury German car makers such as Mercedes Benz and BMW. The problem was, simply, that U.S. customers did not want to spend sixty
five thousand dollars or more on a Volkswagen. The name itself of the people’s car
implies that it’s supposed to be something for the masses and yet here he
was trying to create a car under that brand to compete
directly with Mercedes Benz. And it just it was a car that just
never really fit the brand as good as it was. And it did a little better in Europe
for a time than it ever did here and never, ever sold to any
in any huge numbers here. To be fair, the Phaeton was
said to be very well built. It had all sorts of luxury features,
many of which were quite advanced for the time and some of
which are still rare. For example, the car had a dehumidifier
in the cabin to prevent the windows from fogging. Piëch, who had a background in
engineering, had reportedly handed down a mostly secret list
of 10 specifications. Many of his own engineers said
would be impossible to meet. One publicized spec insisted that the car
be capable of driving 186 miles per hour all day in one hundred
twenty two degree weather and still maintain an internal temperature of
seventy one point six degrees Fahrenheit. Reviewers acknowledged the craftsmanship and
quality of materials in the car. The interior is solidly built
using the finest leather and wood. Volkswagen could find. Even the production of
the car sounded premium. It was built in Volkswagen’s transparent
factory, a glass walled plant with hardwood floors that also functions
as a kind of museum. Volkswagen uses to showcase
its latest innovations. The Phaeton shared the production line
with the Bentley Continental, a car with which the Phaeton
also shared a chassis. But Volkswagen sold only three thousand
three hundred fifty four fattens in the United States, and the company
pulled the car from the U.S. and just a few years. Although sales were stronger in Europe
and China, it remains one of Volkswagen’s most
controversial vehicles. After all, the brand was meant to
bring style and engineering to the masses. The car was also up
against entrenched competitors from BMW, Mercedes and even Volkswagen’s
own Audi brand. Not that it stood much of a chance. The fate hands best year in the U.S. was in 2004 when it sold one
thousand nine hundred thirty nine units. That same year, Audi sold five thousand
nine hundred forty three of its full size eight sedans. BMW sold sixteen thousand one hundred
fifty five seven series sedans. Mercedes sold twenty thousand four hundred
sixty S-classes and Lexus sold thirty two thousand three hundred seventy
three full size LS cars. That same year. Of course, it is understandable that
manufacturers want to go upmarket and there are cars today that well-made as
they maybe sometimes seem to sit a bit awkwardly with their stable mates to
many of those who follow the industry. But anyone who wants to buy a
2004 12 cylinder luxury Volkswagen sedan can now have a on for
less than twelve thousand dollars.

100 thoughts on “Why The Volkswagen Phaeton Failed In The United States

  1. Volkswagen is a premium brand, Audi is luxury, Škoda is the basic more affordable option, SEAT is like Škoda but more sporty looking, Bentley is ultra luxruy, Porsche is mostly sports, a bit of luxury & supercar, Lamborghini's supercar, Bugatti's hypercar

  2. I’ve seen many more Bentley cars on the road than the Phaeton. That alone should speak of its exclusivity. I say buy it if you want it. Seeing one in person makes you appreciate the effort in its design. Its simplicity doesn’t look lazy. The sporty aspects don’t look racy. The brakes are HUGE! It is what a GTI would want to grow up to be.

  3. I'm from Germany and i owned a Phaeton V6 TDI in 2009. I loved it to ride it on the Autobahn. Like on a Cloud! Basically it was a Bentley Flying Spur. I asked myself, what happened to American Brands on the european Market? Only Jeep is left…

  4. The point of the VW Phaeton is not to get VW to compete with BMW and M-B in the luxury market, but to make Audi and Bentley more profitable. The development of the Phaeton cost about $2 billion Euros at the time, something neither Audi and especially Bentley could afford at the time, so the R&D was pushed into VW which can throw away 2B w/o affecting its margins too much. And so the technology developed for this project was then shared with the Audi A8 & Bentley Continental. The center stack of the continental, along with the instrument cluster is basically lifted from the Phaeton, the W12 on the Continental is the same as the Phaeton with 2 turbos added, also keep in mind the A8 was also given the same W12 as an option. Also the factory that was making the Phaeton was basically making the Continental for the longest time, they were just putting the bolts in England. The VW Phaeton may seem ludicrously over engineered & luxurious for a VW, but not for an Audi and certainly not for a Bentley. All in all, Ferdinand Piech deserves a lot of credit for greenlighting this project even if it is just from an accounting POV.

  5. Because it looks almost exactly like a Jetta or Passat on the outside. It should have looked a lot more special and exotic to match the price. This is a common problem with German cars. The later Audi R8 looks almost exactly like a TT even though it’s way more special. I know the Phaeton is good, but the exterior doesn’t look nearly good enough.

  6. This is the typical failure case in all markets. When talking about India – Maruti Suzuki's Grand Vitrara and Baleno (sedan) got the same treatment from makret. Martui was and is the maker of masses' cars and anything premium from its stable is not actually considered 'premium'.

  7. Just saw this title and went to Doug demouro channel and it was really ahead of its competitors way ahead I mean for that time

  8. One of the problems with this car is that when it was shown me and a lot of people assumed that if the Passat was like an affordable version of the A4, comparable in specs to a A4 but with a size closer to the A6, the Phaeton would be something like an affordable version of an A8, same size but probably at the luxury level of an A6. In fact the Phaeton was as good or even better than the A8.
    Nobody could understand what the car was.
    It is a shame, it is said to be an amazing car.

  9. The Phaeton was largely created for Chancellor Gerhard Schröder. He was from the same state in Germany as VW and, being a Social Democrat, he didn't want to be seen in a luxury brand but rather in a "folksier" car.

  10. Metric System!!!

    You have viewers from all the world. You could write below imperial metric units and everybody will be happy

  11. It failed primarily because of the price point it came out at the time, plus the economy was tanking then and only people who had the $$$ to spend on something like the Phaeton got them. But fast forward to today, and they're a bargain if you can find a nice unwrecked low mileage example…….

  12. ffs use SI metric system, the one 99% of the human population uses, not your imaginary, non scientific, fantasy units

  13. If you want information on cars this is not the right channel and definitely not the right video, yeah sure… “vw tried to join the luxury market” vw owns Audi and rolls Royce and Bentley

  14. I heard the main reason Ferdinand piech ordered the development of the phaeton was because they wanted their mainstream VW brand to compete in Mercedes traditional market after they introduced the A class into Volkswagens traditional segment

  15. An utterly pointless car for the segment it was attempting to compete against. A lot of arm chair buyers with romantic intentions will claim they would buy one for a “q” car status but the reality is these didn’t sell. Foolish marketing from VW. They don’t have much integrity however given their falsified co2 emission claims.

  16. I don’t think the car failed we failed the car. A reliable luxury model for that price. The technology in that car was way ahead of its time.

  17. Tbh, it was a miserable failure in Europe too. When you’ve got the money to buy a really nice luxurious car, you’re getting a status symbol, which can’t be a Volkswagen

  18. People care too much about brands, had the Phaeton wear the Audi logo then it would have been a different story

  19. A different kind of luxury car buyer wants distinction but not ostentation. They are the frugal wealthy. They want observes to be slightly puzzled and quietly impressed. They don't want a BMW 7 Series or Audi A8 and they certainly wouldn't lease a car like that. But Volkswagen failed to market this car to that sort of customer

  20. Some say that this car was only build for Kanzler Schröder. Because he wanted a high quality luxury car with no luxury image.

  21. I got to be inside of a V12 model two years ago. It was awesome and I agreed with the owner that VW, made a great car. Bummer it didn’t take off.

  22. The Phaeton was a poor (middle class) man's Bentley. Interior and dials were almost identical. Volkswagen should've done like Hyundai and Genesis or sell it under Audi or even Porsche so idiot consumers could justify spending money on something they wanted that wouldn't make other people look at them like they were better than others for driving it.

  23. They didn't fail, rebranding and using the architecture of the Phaeton into their Bentley Continental / GT was cost effective. keened eyed enthusiast will spot carry over of the V12 engine /seats / AVAC controls etc. Phaeton was their attempt to step out a comfort zone and build a true over engineer-ed Flag ship vehicle and not give customers rebranding of an A8.
    Pull up old promotion videos on the extreme testing and attention to detail of the product lines it was impressive.

  24. It failed here because Americans are very shallow people. Even though this was a better car than most other luxury cars, it doesn’t carry the fancy badge. Therefore idiots prefer to be seen in a C-class Benz, than a much better car.

  25. I own a 2013 VW Phaeton (3.0 TDI) and its the best car i have ever owned! Pure luxury and soft ride, no sport to ruin the pleassure.

  26. Snubbing it for the badge was a disservice. I remember it was by far the most over engineered car on the market. Most likely a total write off but impressive nonetheless.

  27. I have visited the Dresden glass factory last year. It was now hosts assembly line and showroom of VW plug-in hybrid and electric cars. Sadly all the clue of Phaeton was erased from the glass factory, as if Phaeton never existed.

  28. I use to want one so bad but every one I saw suspension was broke and i wasn’t gambling on getting it fixed considering dealers don’t know how to work on them.

  29. VW- ok people we are failing in making luxury car… What should we do….
    Garry- we should try giving best comfort & quality possible.

    Larry- buy Rolls-Royce.

    2 min of awkward silence….

    VW- congratulations Larry u are the project manager of our new Company Rolls-Royce

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