Revamp of Volkswagen’s Phaeton Sedan to be delayed image

Volkswagen AG will delay the launch of its new Phaeton model because the carmaker is looking to make better returns on the slow-selling luxury sedan with a lower production and material costs, according to a source familiar with the matter.

Even if the less successful model is ready for its makeover production, the German car manufacturer has to pay three times the money on reworking the Phaeton than what it would cost to produce the mid-sized Passat sedan, as the same source has it. Volkswagen did not comment on its plans for the revamped model.

IHS Automotive released that the $101,000 sedan has reached its lowest level in sales in more than a decade, having the top sales at more than 10,000 units sold in 2011.

The Phaeton is a project of former Chairman Ferdinand Piech and it does not quite fit in VW’s lineup of pragmatic sedans, hatchbacks and SUVs. The model has hand-selected wood veneers and seats that can be adjusted in 18 different ways, because who doesn’t want that? Moreover, the car is manually assembled in a special place in Dresden, Germany, by technicians who wear white uniforms and sometimes white gloves.

Tim Urquhart, market researcher at HIS Automotive talked about the Phaeton, defining it as an answer to a question no one ever asked, and maybe no one asked for a reason – “Who wants a VW limousine?

Phaeton was ordered by Piech, who stepped down after a public feud with CEO Martin Winterkon, in order to compete with the Mercedes-Benz S-Class. He asked for a car that can be driven comfortably and that can also reach 300 km/h. The car, which is also taking on Audi’s A8, began to be produced in 2002 and has seen no changes to its features since.