VW Phaeton Review/Obituary

[pow]

It's a good read...

RUMBLE SEAT/DAN NEIL

Requiem for a heavyweight

Volkswagen pulls its fine-tuned Phaeton from the U.S., where performance is important but badge image is everything. Really, it never had a chance.

DAN NEIL

April 26, 2006

THE sun-scrubbed desert between Los Angeles and Las Vegas scrolls by with an empty whisper, a high-def silent movie panning past double-thick acoustic windows. East of Barstow, the Volkswagen Phaeton W12 is running at speeds best reserved for those with diplomatic immunity, and yet the big dreadnaught — with a 12-cylinder, 444-hp butter churn under the hood — is eerily unstrained, purring along in top gear, levitated on the four-corner air suspension. Scheherazade only wishes she knew such flying carpets.

What a machine. Born of a fever dream in 2002, the Phaeton was meant to be, in the words of then-VW Chairman Ferdinand Piech, "the best car in the world." And four years later, the Phaeton still commends itself to the title. Built in VW's "transparent factory" — a glass-walled industrial Oz in Dresden, Germany — the Phaeton is as grand a piece of engineering decadence as you'll find anywhere. Much of the Phaeton's bone and sinew — such as the optional 6.0-liter W-configured 12-banger, four-way adjustable pneumatic suspension, steering, brakes and electronic systems — are shared with its VW Group cousins the Bentley Continental GT and Flying Spur and the Audi A8L W12, supercars all.

But it's not the heavy hardware that makes the Phaeton so beguiling. It's the grace notes: The ghostly smooth motorized action of the walnut panels that open and close over the dashboard climate vents; the corporate jet interior, with chrome pin-striping and Italian leather upholstery; the sunroof spoiler that adjusts to prevent high-speed buffeting and wind noise; the dual-magnification vanity mirrors; the 18-way power adjustable driver seat with heating and air-conditioning, massage function, power lumbar support and headrests. This car does everything but make waffles.

Not since the analog days of the late '80s Italian cars have so many switches been gathered in one cabin; altogether there are nearly 200 buttons and controls mastering everything from four-zone climate control to power rear sunshade.

And now the Phaeton is a phantom. Last year, VW announced it was discontinuing sales of the Phaeton in the North American market (the car is faring reasonably well in other global markets). Initially projected to sell in the range of 10,000 units in the U.S. annually, the Phaeton found only 820 customers in all of 2005. The last few units are making their way to reluctant dealers about now.

Success has many fathers; failure has many coroners. And since VW's announcement, car cognoscenti have sagely autopsied the Phaeton. Well, of course it was a flop, goes the conventional wisdom. Who ever heard of a six-figure Volkswagen? Plainly, the American conception of the VW brand — formed in the postwar decades by such lovable, low-rent models as the original Beetle, Rabbit and GTI — could not be stretched to include a premium saloon competing with the likes of Mercedes-Benz, BMW and Audi.

Speaking of Audi: One of their executives was fired for criticizing the Phaeton (and by extension, Piech) after he said the biggest problem with the car is that you have to go to grotty VW dealerships to buy one. (Note also that the Phaeton was a direct competitor to Audi's own A8L. Talk about friendly fire.)

The Phaeton has been derided as "Piech's folly," the worst example of overreach during his tenure, which — the consensus view holds — saw the company blow billions of euros on exotic brand acquisitions (Lamborghini, Bentley, Bugatti) while the core product lines grew stale and quality and reliability spiraled down.

Piech, a brilliant engineer and heir of the Porsche fortune, stepped down as chairman of the management board in 2002, turning over the reins to Bernd Pischetsrieder. Meanwhile, Volkswagen sales in the U.S. have declined by about one-third since 2001 and are only now recovering.

And so the Phaeton stands convicted on many counts: the wrong car, at the wrong time, for the wrong reasons, from the wrong company.

Yet as the car hurtles splendidly across the desert and into history, the only fault I find is with consumers.

The worst thing anyone ever said about the Phaeton is that it was a VW, and if you could have somehow pried the badge from the slatted grille the car would have been a hit. But buyers didn't want a VW starting at $66,700 (the base price of a V8 model) because it didn't reward people with the caffeinated buzz of envy and prestige. So it was purely badge snobbery that sank the car. I am amazed when people cite this as if this were an altogether predictable, even commendable feature of American consumerism.

My reading of the Phaeton was that it was a car for the American haute bourgeoisie, buyers who had come up through the ranks of the economy and were sentimental about their cheap old VWs. It was the "people's car" after the people made good. To the extent that any car is a metaphorical expression of the purchaser's worldview, the Phaeton implied an owner who, though wealthy, retained a measure of populism. The demise of the Phaeton says something, and something not good, about Americans' pretensions of a classless society. We just don't do stealth wealth.

I'm also not sure about the overreach argument. Was there overlap between the Phaeton and the A8L? On paper, perhaps, but the gestalt of the cars was very different. And why, if Mercedes-Benz can sell cars from $20,000 (the A-Class, sold in Europe and the rest of the world) to $450,000, couldn't VW extend toward the luxury market with a halo car? Chevrolet sells a $60,000 Corvette. Toyota sells a $50,000 SUV. Ford sells a $150,000 mid-engine sports car. Was an overachieving luxury sedan from VW really so unthinkable?

As much as anything the Phaeton was torpedoed by the devaluation of the dollar in the early years of this decade. What was conceived as a $50,000 luxury car — well within the imaginable limits of the VW brand — quickly became a car costing tens of thousands more. The Phaeton and to a certain extent Piech's reputation were victims of 9/11.

As for slumming at VW dealerships, I suppose this makes some kind of sense, though I think it's an objection based on the sense of prerogative and entitlement of luxury car buyers. What, they're too good to sit in the waiting room with everybody else?

I don't exactly mourn any 2 1/2 -ton car that gets 15 miles per gallon. But if the Phaeton was a miscalculation, it was a grand and ambitious one, and so unlike the tepid half measures of other companies (the Pontiac GTO comes to mind). The fact is the Phaeton was for a time better than the relevant models from Mercedes (S600) and BMW (750Li), and thousands cheaper too. It's hard to drive the car now — to sit in its leather-perfumed cabin, to feel its watch-work balance and synchrony — and declare it anything but a success.

The Phaeton will make another kind of history, as the best used car value ever. Low-mileage V8 models are selling for under $50,000. You would be hard-pressed to find any car for that money with half so many amenities, so many finely curried surfaces, so many strokes of technological lightning, so much will and passion distilled into steel and aluminum.

I'm sorry to see it go.

http://www.latimes.com/classified/automoti...-autos-highway1

Edited May 8, 2006 by empowah

[balthazar]

I would be simply terrified owning this car; if VW cannot get a jetta-level car reliably engineered, this one has to be a rolling nightmare. No word on any problems in the piece, tho that doesn't mean either there aren't plenty or plenty aren't on their quick & sweaty way.

And people, please note: that supposed "flop" according to Websters, the Edsel, sold roughly 32% of it's first-year projected volume (Let's not mention it did reach into it's 3rd model year, too). The phaeton sold 8%. That blows greasy chunks.

Oh, and mention should also be made about the overall theme of this article. It's not a review, it's an attempt at a revisionist theory that the flop is, in fact, NOT a flop, because this snowflake likes it.

[thegriffon]

As a luxury car the Phaeton flopped, priced at a reasonable price with a V6 and V8 engine only (30-45K) in the swb model and they may have sold more than they could build.

Edited May 8, 2006 by thegriffon

[Guest Josh]

The whole piece seems to be about the American people not accepting a badge engineered vehicle.

Hello dumb$h!, isn't that what got GM into this boat to begin with?

[daves87rs]

Nice car, very nice car.(drove in one. )

Also most pointless car ever.

[daves87rs]

The whole piece seems to be about the American people not accepting a badge engineered vehicle.

Hello dumb$h!, isn't that what got GM into this boat to begin with?

NO, he's just pretending that the car was really something better than it really was.

There was nothing great about the car in the first place....

[VenSeattle]

I personally think this car is amazing... I'm not worried about quality since it is hand-built next to Bentleys in Dresden. I was behind one when going through a Starbucks drive-thru over the weekend. It actually made me want the Lucerne instead though...

So it was purely badge snobbery that sank the car.

Absolutely correct... which is why I approve of Buick's slow transition to premium/luxury status.

[CSpec]

I personally think this car is amazing...

[Intrepidation]

And why, if Mercedes-Benz can sell cars from $20,000 (the A-Class, sold in Europe and the rest of the world) to $450,000, couldn't VW extend toward the luxury market with a halo car? Chevrolet sells a $60,000 Corvette. Toyota sells a $50,000 SUV. Ford sells a $150,000 mid-engine sports car. Was an overachieving luxury sedan from VW really so unthinkable?

This is so true. Why is it that other everyman companies can market uber expensive cars and it's ok, but just because VW wanted a luxury halo car instead of s sports car they haf to get slammed for it?

And Josh, it's not badge engineered, it's platform engineered. We've been through this before. There's a difference and you know it.

I think it's a great car, and the fact that it was better than compareable Mercedes and BMWs of the time is saying something, and it looks better than the new ones do. I'd be happy to own one of these.

You have to admire VW for trying, and not half-assing it, and you half to feel distaste toward the American consumer for their badge snobbery.

[Flybrian]

This is so true. Why is it that other everyman companies can market uber expensive cars and it's ok, but just because VW wanted a luxury halo car instead of s sports car they haf to get slammed for it?

And Josh, it's not badge engineered, it's platform engineered. We've been through this before. There's a difference and you know it.

I think it's a great car, and the fact that it was better than compareable Mercedes and BMWs of the time is saying something, and it looks better than the new ones do. I'd be happy to own one of these.

You have to admire VW for trying, and not half-assing it, and you half to feel distaste toward the American consumer for their badge snobbery.

1) VW made too great a leap without thinking of the consequences. As Thegriffon alluded to, selling a more reasonable car at $40-55k would've made more sense, moved more units, and done so much more to increase people's respect for VW than this waste of time, money, and engineering

2) Being better than the electrically-overwrought 760 and S500 isn't an achievement in my book. What Balthazar alludes to is true as well - VW made a gross miscalculation in thinking the clientele that would typically show interest in a car of this stature would purchase one from a Volkswagen dealership. Its not badge-snobbery as much as it is logical thinking. Compare the service you get at a VW dealer to one you'd find in your average Audi retailer; that tells a good portion of the story. Also, regardless of how 'trained' the techs are, I wouldn't feel as comfortable having my $85k luxury saloon serviced by the same people who can't fix the same Jetta that's been brought in for the fifth time. VW reliability unto itself also leaves a lot to be desired.

3) Distaste for the American consumer? Why? For not overspending on this car? I give a big congratulations to all the Americans and Europeans who weren't suckered into paying sticker for this beast. Perhaps the most intelligent of all are those who collectively turned their noses up at this misplaced boat, forcing VW to scrap it, and then scraping up the remains for 30-40% off original MSRP.

Perhaps the American consumer isn't so ignorant after all...

[sciguy_0504]

Fly is right on the money.

[pow]

1) VW made too great a leap without thinking of the consequences. As Thegriffon alluded to, selling a more reasonable car at $40-55k would've made more sense, moved more units, and done so much more to increase people's respect for VW than this waste of time, money, and engineering

2) Being better than the electrically-overwrought 760 and S500 isn't an achievement in my book. What Balthazar alludes to is true as well - VW made a gross miscalculation in thinking the clientele that would typically show interest in a car of this stature would purchase one from a Volkswagen dealership. Its not badge-snobbery as much as it is logical thinking. Compare the service you get at a VW dealer to one you'd find in your average Audi retailer; that tells a good portion of the story. Also, regardless of how 'trained' the techs are, I wouldn't feel as comfortable having my $85k luxury saloon serviced by the same people who can't fix the same Jetta that's been brought in for the fifth time. VW reliability unto itself also leaves a lot to be desired.

3) Distaste for the American consumer? Why? For not overspending on this car? I give a big congratulations to all the Americans and Europeans who weren't suckered into paying sticker for this beast. Perhaps the most intelligent of all are those who collectively turned their noses up at this misplaced boat, forcing VW to scrap it, and then scraping up the remains for 30-40% off original MSRP.

Perhaps the American consumer isn't so ignorant after all...

Nah, only select VW dealerships (usually the ones paired with Audi and Porsche) carry and service Phaetons. As far as overspending, it stickered less than comparable S-classes and 7ers.

Maybe its biggest problem was the fact that Kim Jong-il rides in one...

[regfootball]

The whole piece seems to be about the American people not accepting a badge engineered vehicle.

Hello dumb$h!, isn't that what got GM into this boat to begin with?

and imagine the outcries of inappropriateness if Buick sold an 80,000 dollar sedan.

why is the phaeton's steering wheel so cheap looking/parts binny if the car sells at 6 figures?

I still find it wierd i saw three unique phaetons within 15 miles of my house within 2 hours last sunday

Edited May 9, 2006 by regfootball

[Mr.Krinkle]

i just wonder if they thought vw buyers are that brand loyal...i mean, was there a couple somewhere saying, ya know, honey i really like that beetle but the phaeton is more in our price range.

people complained that the pontiac bonneville was pricey at 30k...good reviews usually but always concluded with its a little pricey for a pontiac

the germans do have balls though...look at i drive for example.

[VenSeattle]

and imagine the outcries of inappropriateness if Buick sold an 80,000 dollar sedan.

Based on public perception, the reason for the "inappropriateness" for Buick to have an $80k vehicle is similar for VW: Cadillac & Audi.

If VW & Buick were stand alone entities, the market might be more accepting... but when both companies already have a luxury brand selling $80k vehicles, the market just has to ask: Why?

[FAPTurbo]

Volkswagen pulls its fine-tuned Phaeton from the U.S

...and the world lets out one big collective, "meh..."

[GMFAN83]

I guess it will be rare. So, I expect it to grow in value as it becomes a collector car in like 15 years or so.

Edited May 11, 2006 by GMFAN83

[Clownzilla]

Based on public perception, the reason for the "inappropriateness" for Buick to have an $80k vehicle is similar for VW: Cadillac & Audi.

If VW & Buick were stand alone entities, the market might be more accepting... but when both companies already have a luxury brand selling $80k vehicles, the market just has to ask: Why?

I ask the same question! Although I kind of like this car (even though it is too expensive), I can't see why a person would buy this over the superior Audi A8. Especially when your talking about cars this expensive.

[Stag]

But the question is...if you could pcik one up for dirt cheap (relatively speaking) would you? I think I would. If I could find a W12 in the $35k range. I am not sure how much value these cars retain, but I can definitely see a short term fall off in price with an increase in value in the long term simply due to the scarcity.

[balthazar]

>>"...but when both companies already have a luxury brand selling $80k vehicles, the market just has to ask: Why?"<<

If the vehicles are truely sufficiently differentiated, the market should never focus on the fact that they share the same parent corporation. This was never a problem with GM until rampant inter-divisional sharing became commonplace. VW & audi are not at that autonomous level (like vinatge GM) of course.

>>"I guess it will be rare. So, I expect it to grow in value as it becomes a collector car in like 15 years or so."<<

15 years is far too soon for a non-exotic/non-specialty to become a collector vehicle. The phaeton, regardless of my general opinion of it, is not going to appeal to collectors in general for a lot longer than 15 years- by that time what kind of shape are all the electronics going to be in?

Lot of scarce cars never achieved notable value in the collector market.

[VenSeattle]

>>"...but when both companies already have a luxury brand selling $80k vehicles, the market just has to ask: Why?"<<

If the vehicles are truely sufficiently differentiated, the market should never focus on the fact that they share the same parent corporation. This was never a problem with GM until rampant inter-divisional sharing became commonplace. VW & audi are not at that autonomous level (like vinatge GM) of course.

I agree... A lot of people viewed the Phaeton as a re-badged A8, when it wasn't. One VW mistake was introducing the Phaeton W12 around the same time Audi received the A8L 6.0... automatic association, with discredit going to the VW.

A completely unique Zeta-based Buick luxury sedan similarly priced to the Cadillac STS would probably be more accepting because 1) price 2) they wouldn't have anything in common.

But if Buick would have coincidentally debuted a 440hp Super V8 in the Zeta sedan the same time Cadillac debuted the STS V-Series, well then... Market would assume Cadillac clone.

As you said... In order for GM to accomplish what VW failed to do, GM needs to make sure their overlapping models are sufficiently differentiated.

[enzl]

I agree... A lot of people viewed the Phaeton as a re-badged A8, when it wasn't. One VW mistake was introducing the Phaeton W12 around the same time Audi received the A8L 6.0... automatic association, with discredit going to the VW.

A completely unique Zeta-based Buick luxury sedan similarly priced to the Cadillac STS would probably be more accepting because 1) price 2) they wouldn't have anything in common.

But if Buick would have coincidentally debuted a 440hp Super V8 in the Zeta sedan the same time Cadillac debuted the STS V-Series, well then... Market would assume Cadillac clone.

As you said... In order for GM to accomplish what VW failed to do, GM needs to make sure their overlapping models are sufficiently differentiated.

What would qualify as 'sufficiently differentiated' to have worked?

I've always thought the Concept One (5 door version of Phaeton?) would have worked at $45 K, decontented instead of equally luxurious....think last gen A6 interior spec....

That was what I thought might have worked as a step above the Passat W8......

[Eyecare]

Actually I think this is an excellent and well thought out article. There is no question that the Phaeton was the wrong car for the wrong market, at least in the US. VW expected loyal owners ready to jump into the luxury car segment to stick with the VW brand. What they didn't count on was the prestige mentality - something that Toyota thought of when they made up the Lexus brand. Would anyone here want to buy a $65k luxury Toyota? The comparison with a Camry would be inevitable.

So it really isn't about the car itself but more about branding. You'll find most Phaeton owners satisfied with their purchase as it's a well engineered car. It also provides exceedingly good value for the money, especially when compared with its direct competitors, like the S class, 7 series, and A8. Service departments can be a problem but VW North America spent a great deal of effort to ensure well trained people were in place. They also have one of the best buy-back programs if a customer was dissatisfied with even the smallest detail. No, the problem wasn't the car, it was with perceptions and a failure in marketing this product correctly.

[pow]

It's all a bit confusing, too, when you consider the success of the Dodge Viper and Ford GT.

[Paldi]

It's all a bit confusing, too, when you consider the success of the Dodge Viper and Ford GT.

Well, VWofA and the new team at VW Germany essentially abandoned advertising the car shortly after it was introduced here. It's doing great elsewhere in the world but no advertising in the US hindered its acceptance. VW later fired their advertising agency and hired a better one. There was an internal argument between Audi and VW about this car - introduction of the A8 was delayed for it.

I have been a Phaeton enthusiast from the beginning, having ditched my plans to buy a 2004 A8 to go with a slightly used demonstrator Phaeton V8 for $50,000 including tax. A great deal on an untitled car! I recently upgraded the wheels and tires by "borrowing from the manufacturer's parts bin" - a great set of Bentley Continental GT wheels and matching Pirelli tires. After 27,000 miles I still love my Phaeton. I find the service at my VW dealership to be outstanding and have enjoyed the Touareg and new Passat loaner cars I've received free during my scheduled warranty service visits. My car also suffered from a pesky "Check Emissions Light" that was fixed under warranty. Otherwise it's been care free.

Edited June 2, 2006 by Paldi