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
Volkswagen usually leaves the task of
selling pricey sports cars, luxury
rides and super cars to its sister
brands such as Porsche, Audi and
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
The Volkswagen Phaeton was, by most accounts,
a marvelous car, but it was
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
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
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
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
But anyone who wants to buy a
2004 12 cylinder luxury Volkswagen sedan can
now have a on for
less than twelve thousand dollars.

99 Replies to “Why The Volkswagen Phaeton Failed In The United States”

  1. Over the years since I’ve come to enjoyed many aspects of of Phaeton. But it was just way too expensive for what it offered and was not even close to being reliable. Also I don’t think anyone was buying the Phaeton in the United States to go a hundred plus miles an hour frequently.

  2. so bottom line, people buy luxury cars as a status symbol and the Volks Wagen brand is not one that is associated with affluence. there, I save you 5 minutes

  3. Phaeton did well in China somehow because buyers loved its subtlety. In those buyer's eyes, Phaeton was just a larger and more luxurious Passat.

  4. VW never needed to go upmarket. Their brand perception is already upmarket compared to their competitors (Ford, GM, Toyota)

  5. Regular Car Reviews covered this perfectly. The Phaeton is low radar luxury for the millionaire who doesn’t want to show off his wealth. He owns a Genesis now.

  6. In Greek Mythology, Phaeton was someone who flew too close to the sun. The heat was too much so he fell down. Volkswagen was much the same.

  7. I rent a lot of cars, and the worst car I’ve ever rented was a VW. No new tech, just the same old Jetta from 20 years ago. Nothing changed but the body style. VW’s are crappadappa! 😆. Seriously, Chevy cruise is epic compared to that thing.

  8. One of the most memorable episode of Top Gear for me was the Phaeton. Jeremy Clarkson shot a skit, where he & a hot chick on the backseat would attempt to make the car windows steam. Jeremy ran a electric kettle of to make tea inside with the air conditioning at full blast. The Phaeton car windows didn’t even steamed!

  9. not too flashy enough, people here in Germany and most other european countries (especially the north) don't like to flex and ride flashy cars, in the US people want to be seen, most people there would think it's a normal Volkswagon or mistake it for a Passat.

  10. I used to love this car until 8yrs of ownership, car keep going to the dealership for recalls and repairs. First thing goes air suspension by the 3th yr, then fuel injectors issues same year, then fuel pump year after then oil pump few months after that, then interior ac vents stop working properly. I drove everywhere with the vehicle when sold it ,it had just about 150k miles on. I did the maintenance by the book and extra and still gave me problems. The last draw was the transmission.

  11. Anyone who spends 12k to got one of these Phaetons should be mentally prepared to spend another 10-12k on repairs and services every year…

  12. 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

  13. 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.

  14. 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…

  15. 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.

  16. Because it looks almost exactly like a Jetta 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.

  17. 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'.

  18. VW 2005 and 2006 available. I have a 2005 grayishUe/green (Coucou Grey). V8 with all options, dark grey interior.
    2006 is black with tan interior. It’s a V8 too.
    Both vehicles are in the 128-135k for mileage.

    Also both have dents a couple maintenance lights on. Black one recently hit in the front driver side quarter panel, very minor.
    Grey one was rear ended at a intersection about 3 months ago. No frame damage but back bumper and exhaust pipes need replacing, trunk won open.
    I haven’t listed these for sale yet but if you like what you saw in the video and would like one in real life, let me know. I’d take $5500 each.

  19. 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

  20. 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.

  21. 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.

  22. Metric System!!!

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

  23. 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…….

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

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