Once an automaker’s brand identity has been firmly established for decades, it is extremely hard to alter. A few brands, such as Hyundai, have successfully made the jump from budget to luxury over the course of years, thanks to a complex multi-factor strategy.
Today, however, we are focusing on a brand whose identity was too firmly entrenched to move into a different part of the market: the “people’s car”, or Volkswagen. The German brand tried to move into the realm of luxury cars, but the model it chose to do so turned out not to be up to the task. We’re talking about the Phaeton, Ferdinand Piëch’s pet project that was supposed to turn VW into a luxury brand on par with Bentley. However, the Phaeton did not succeed in this, and its manufacturer’s ambitions were shot down as the Volkswagen Group’s dynamic resisted the change. Let’s take a look back at how the Phaeton shot for the moon, but ultimately failed at changing Volkswagen’s essence as a brand.
The Phaeton: A Symbol Of Volkswagen’s Ambition
2004 – 2006 Volkswagen PhaetonVolkswagen
Volkswagen Phaeton (W12 Version)
Engine
6.0-liter W12
Horsepower
420 hp
Torque
406 lb-ft
0-60
~5.5–6.0 seconds
Top Speed
155 mph (limited)
The Phaeton had a big job to do before it ever left the production line. It was meant to signal Volkswagen’s shift towards a new dimension of luxury, but didn’t quite live up to the expectations placed upon it. Part of the reason was its design: the Phaeton, despite attempting to market itself as a high-end car, had the visual appearance of an unassuming mass-market sedan, in line with the rest of Volkswagen’s offering at the time from a styling perspective.
It was unveiled in 2002, going on sale for that same model year, but wouldn’t land on American shores until two years later. Rather than having multiple generations, the Phaeton had a single generation made up of five different series, the first three of which introduced minor updates including upgraded brakes, wheels, and lighting. Before the second series had come to an end, however, the Phaeton made its exit from the American market, with 2006 as its last year on sale in the States.
For the majority of its production run, the Phaeton came in two different wheelbase lengths and two seating layouts. One had room for four passengers, and offered a full center console, while the other had room for five and included 12-way adjustable front seats. In engine terms, the US model only offered two options (a V8 and a W12, which we’ll go into more detail on later), but other markets offered a much wider range of engine layouts. The V8 model came with a six-speed automatic transmission, while the W12 had a five-speed automatic. Both sent power to all four wheels, although a FWD layout was available outside the States.
2004 – 2006 Volkswagen PhaetonVolkswagen
After leaving the US market, the model continued to be sold elsewhere, as Volkswagen was clearly unwilling to give up on its project despite low sales numbers. A fourth series, which introduced more radical changes, was introduced for 2011. Some of its updates included a new bumper, new LED running lights, and a reworked front fascia that visually brought the model in line with the rest of Volkswagen’s lineup. A similar redesign was done for the rear lighting, which now looked closer to that of models such as the Passat.
The Phaeton’s final update, which mainly involved the lighting and interior, lasted just two years, being introduced in 2014. Eventually, Volkswagen realized the Phaeton had not accomplished what it was meant to do, and pulled the plug on the model alongside its upmarket rebranding project. A second generation had been in the works at the time of the Phaeton’s discontinuation, but only resulted in a single prototype being built. Today, you can pick up a used Phaeton for a fraction of its original price, with the cheapest examples costing around $10,000 and the most expensive ones around $25,000.
Ferdinand Piëch’s Vision: The Phaeton’s Development
2004 – 2006 Volkswagen Phaeton interiorVolkswagen
The Phaeton traces its origins back to a crucial figure from the Volkswagen Group’s history: Ferdinand Piëch, grandson of Ferdinand Porsche and chairman of the Group between 1993 and 2002. Piëch realized that Volkswagen was competing in an increasingly crowded market, with brands such as BMW and Mercedes threatening to encroach on its space. His solution was drastic: move Volkswagen upwards into the territory of luxury cars, with a new model that would capture the public’s attention and change perception of the brand.
The choice of name for this model immediately evoked the idea of luxury travel and historical inspiration: a “phaeton” (a term borrowed from Greek mythology) was a type of horse-drawn carriage, whose chief characteristics were low weight, rapid speed, and luxury. The Phaeton would occupy a place of pride in the Volkswagen lineup, as the brand’s new flagship model. Unlike the Audi A8, the Volkswagen Group’s main full-size luxury sedan at the time, the Phaeton would be focused on comfort instead of performance, providing a premium experience for driver and passengers alike.
2004 – 2006 Volkswagen PhaetonVolkswagen
In order to achieve this objective, Piëch set out highly specific guidelines for the design team. He determined the car should have a torsional rigidity of 37,000 Nm/degree, and that its top speed should be limited to 250 km/h, or 155.3 mph. He also had very high standards regarding its endurance and ability to maintain a cool temperature via its four-zone climate control system. According to his vision, the Phaeton should be able to maintain a cabin temperature of 72°F while being driven around all day at a speed of 186 mph (300 km/h), with an external temperature of 122°F (50°C). These criteria are more than slightly hyperbolic, and it’s unlikely any version of the Phaeton would ever be able to accomplish this, but they are still an indication of how high Piëch’s standards were and what he envisioned for both the Phaeton and Volkswagen’s future in general.
The model made its debut in concept form in 1999. Given the name of Concept D, this version was very different from the production model, as it was a hatchback with a turbodiesel V10; the production car arrived after a further three years of development work.
The Phaeton’s Heart: The W12 Engine
Ferdinand Piëch’s W engine, revealed to the public in 1997.Volkswagen
Although the Phaeton offered a wide variety of engines around the world (including V8, VR6, V6, W12, and V10 units), US buyers only got a choice of two during the model’s three-year American run. One was a 4.2-liter V8, which produced 335 hp and 317 lb-ft of torque. The other, however, was far more interesting: the 6.0 liter W12, which had a unique layout and was only featured in a handful of cars.
This engine was built by joining together two VR6 units; the result was smooth power delivery, high performance, and reliability. This made the W12 a great choice for a car like the Phaeton, which took pride in being more high-end than the rest of Volkswagen’s lineup. The W12 was also a fairly compact engine due to its short engine block, which made it highly adaptable.
Volkswagen
Other models powered by this engine over the years include the Audi A8, a variant of the Volkswagen Touareg, the Bentley Continental GT, and even a concept version of the VW Golf GTI.
Why The Phaeton Failed, And What It Meant For The Volkswagen Group
2004 – 2006 Volkswagen PhaetonVolkswagen
Despite the amount of effort Volkswagen put into the Phaeton, the model did not encounter a great degree of commercial success. Although it was intended as a luxury model, it had a subtle, simple design that did not catch the eye. It’s price tag, on the other hand, was firmly into luxury car territory, creating a disconnect that prospective buyers were not willing to put up with. Ultimately, buyers at this level simply continued to put their money into established luxury products from brands such as Mercedes-Benz and BMW, rather than rolling the dice with Piëch’s pricey Passat.
Volkswagen’s original plan was to sell up to 20,000 units per year, but the Phaeton did not even manage half that figure, selling around 6,000 units per year during its first four years of life. On the North American market, the model only lasted three years (2004, 2005, and 2006) before being discontinued. Globally, just 84,000 examples of the Phaeton were built over its entire 14-year production cycle.
2004 – 2006 Volkswagen PhaetonVolkswagen
The Phaeton’s journey was not just about the failure of an individual car: it brought about a restructure of the Volkswagen Group and a change in how the brands placed themselves within it. Volkswagen’s place in particular was affected, as the Phaeton had been the symbol of its ambition to break into the luxury market. When it became clear that the model was not going to achieve the goals Volkswagen had envisioned for it, the brand had to admit that its move into the high-end sector wasn’t going to happen.
Other brands took up the spaces Volkswagen was meant to expand into with the Phaeton: Bentley continued to be the Group’s ultra-luxury brand, while Audi occupied the “premium sedan” corner of the market. Volkswagen, on the other hand, remained true to its name, producing more affordable mass-market models that still offered quality and reliability. The Phaeton may have been a failed experiment, but it did a good job of showcasing Volkswagen’s ambition and its ability to dream big, if only for a short period of time.
Sources: Volkswagen
