Looking for a Bentley or Audi R8, but want to avoid paying the premium prices? Well, a used VW Phaeton could just fit the bill. The Phaeton was launched in 2002 as Volkswagen’s answer to the Mercedes-Benz S Class. It was marketed as a competitor to luxury sedans that carried a more affordable price tag. While on the outside, it looked like a grown-up VW Passat, the Phaeton shared some of its engineering with its stablemates from Bentley and Audi.
VW's Attempt To Go Up Market
The Volkswagen Group as you may know owns a number of brands including Volkswagen itself, ŠKODA, SEAT, Bugatti, Audi, Lamborghini, Bentley, Porsche, and Ducati. Back in the 90s, Volkswagen acquired the Czech brand Skoda, making it the budget and affordable brand within the VW Group. This gave Volkswagen an opportunity to go upmarket. Enter the Phaeton.
The Phaeton was the final pet project of the late VW boss, Ferdinand Pïech, grandson of Ferdinand Porsche before he retired as the CEO of Volkswagen. During the design and production phase of the Phaeton, there were staffing issues due to the sheer scale of engineering and attempting to meet 10 stringent parameters set out for the Phaeton by Pïech.
VW Engineers were tasked with coming up with an automobile that could maintain a steady 72 degrees Fahrenheit in the cabin, while the ambient temperature was 122 degrees Fahrenheit and the car was traveling at 186 mph. While the resulting car doesn’t look extraordinary on the outside, it is over-engineered and unappreciated on the inside.
Volkswagen Phaeton Engine Specifications
In the U.S., the Volkswagen Phaeton was offered with two engines: a 4.2-liter V8 with 335 horsepower or a 6.0-liter W12 engine (shared with the Bentley Flying Spur) with 420 horsepower. It can achieve 0-60 mph in 6.5 seconds and 1⁄4 mile in 15.1 seconds. For the level of engineering it offered, this car was ground-breaking for VW. When it was first released, it had a base price of $83,000, but with the addition of various options, the end price could be a lot more. The W12 model, which was the one you really wanted was $125,000. The Phaeton came with VW's 4Motion all-wheel-drive system.
But it was a complete failure, with only 2,253 people purchasing it in the US in the early 2000s. Even Germany, which was predicted to be the Phaeton’s biggest market, only sold around 6,000 units annually. While Volkswagen stopped selling the Phaeton in the U.S. in 2006, it remained in production in Europe until 2015 and was manufactured at VW's transparent factory in Germany.
Volkswagen Phaeton's Standout Features
The VW Phaeton has a range of unique and valuable features that, from a car lover’s point of view, make it an automotive spectacle. One of the main features is that it comes with two batteries, one for the starter and one for accessories. Other features included anti-glare cluster glass, a climate control system that could maintain four distinct temperatures between 64 and 82 degrees Fahrenheit, incredible noise isolation, intuitive wiper blade technology, and dehumidifying windows.
If that wasn’t enough, the interiors were crafted using the finest leather and wood available at the time. All these features added to the feeling of luxury within the car, and the engineering confirmed it when it was driven. So it begs the question, why was no one interested in it?
The Volkswagen Phaeton’s Failure
The Phaeton’s failure was due to a few different factors. The luxury sedan market is an area that is both competitive and saturated. The Phaeton always had a mountain to climb as it faced competition from the Audi A8 and Bentley Continental. Over the time it was in production, it never had a definite brand goal. It tried to portray a feeling of “if you bought this car, you would be buying into a luxurious lifestyle,” as Mercedes offered with the S Class. However, it was a goal that just never landed for the Phaeton and Volkswagen. It was a big part missing in making it a global success.
The Volkswagen Phaeton was destined to be in the same category as the Mercedes Benz S Class, BMW 7-series, and Audi A8. But its positioning for VW at the time was too far removed from how Volkswagen was perceived. It was known as “the people’s car,” the brand for safe family cars, not luxurious automobiles. Also, it was really expensive at the time; Volkswagen should have reconsidered the price, especially as it was VW's first attempt at a luxury vehicle. If it had a more sensible price tag, it would have stood out more to potential customers, and eventually, the engineering and high-quality interiors would sell.
While the Volkswagen Group collectively manufactures cars from several luxury brands within its stable, Volkswagen itself is not known to make luxury cars. But it is not a budget brand of cars either; it sits somewhere in the middle as a brand that delivers a certain amount of performance for a reasonable price.
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While there aren’t many examples of the Volkswagen Phaeton on the second-hand market compared to other luxury sedans from the time, it can be had for anywhere for somewhere in the region of $25,000 depending on the spec of the model. It is a far cry from the $100,000+ when new.
So to summarize, Volkswagen tried to up its status from reliable and sturdy to luxurious and fast, but it did not work. The Phaeton was not a successful venture for them, but from its failure, Volkswagen as a brand must have learned some valuable lessons.
Moving into a new segment of the automotive industry requires more than just excellent engineering; it requires a little something extra to get buyers to want to buy your car. Volkswagen has stated that a new 2.0 and a hybrid version of the Phaeton will come out eventually, they even made a concept car Phaeton D2 but nothing has yet to go into production.