<img src="http://www.edmunds.com/media/news/column/letterstotheediors/02.jul/04.vw.phaeton.f34.500.jpg">

Headlines...

Drivers Wanted

Volkswagen Stalls On Several Fronts After Luxury Drive

Focus on High-End Phaeton Leaves Gaps in the Lineup; Recall (ignition coils) Dents Reputation

Empty Couch in the (special VW Phaeton section) Showroom

Chart...

"Losing Power"

"Volkswagen's troubled drive to become a luxury-car maker by pouring millions into superpremium vehicles such as the Phaeton (pictured) has added problems with slumping sales and profits."

(Sales chart shows performance of the company dramatically worse when its one bright spot--China--is factored out)

(Graph of "problems per 100 vehicles" shows VW worse than industry average each of the most-recent three years)

Article makes these points...

- VW first quarter profit down 68%, sales down 2.7%

- VW spent $700 million developing the Phaeton, and another $200 million on the Dresden plant to build it.

- As of a year ago, VW had capacity for building 6 million vehicles a year, but was only making 5 million.

- $70,000 Phaeton only sold 3,009 units in year one, just one-quarter of what was expected. Launch was delayed by significant problems with on-board computers.

- VW marketing group blames lack of engine options for Phaeton problems; engineers blame marketing for "not generating enough buzz."

<img src="http://www.aids.gov.br/cen/logo_vw.jpg"><ul><li><a href="http://online.wsj.com/article_email/0,,SB105234235391771900-H9jeoNplaF2oZutbHqGca2Dm4,00.html">Full Text (Thanks, Stoney...you, too phred-oh!)</a></li></ul>

 

or just use it here<ul><li><a href="http://online.wsj.com/article_email/0,,SB105234235391771900-H9jeoNplaF2oZutbHqGca2Dm4,00.html">Free WSJ</a></li></ul>

 

The real story to watch is not the slow demise of the Phaeton, but how the launch of the Golf V goes. That's the bread and butter car for VW AG. If they have problems like they have with the current Golf IV, they could be hanging out the "For Sale" sign and BMW and Merc could start kicking the tires.

 

Even then, I suspect it will be a loosing battle. However, if they keep it up a few model cycles, they may eventually build a name in the luxury end of the market here.

What on earth are they thinking anyway ? What little cred they have in the upper end of the luxury market here, is due to the A8, not any VW product.

There is a glut of high end automobiles coming to market now, and VW needs to have a trump card if they hope to attract buyers.

 

I mean, they just made some STUPID decisions. No SUV when everyone and their mother has been driving one for years? New Tourag is beautiful, but very late to the party. What about Audi SUV? Now we wait till possible 2005. Just plain stupid as BMW and Mercedes laugh all the way to the bank with their SUVs. Also, the new TT is finally getting some horsepower, but it is still not as fast as my 4.2!

How about the technology? New A8 looks awesome and is very high tech, but it won't have a ton a features until 2004 or 2005 (push button start, headlights that move when you turn, trunk that automatically raises, etc.) Why? How about rain sensing wipers for god's sake! How many years do we have to wait for that? These are not huge items, but when many other carmakers have been offering these options for literally years, Audi looks like it is playing catch up (Never Follow my ***!). I could not get OnStar in my 2002 4.2 nor an integrated telephone!

Also, why the long wait for S models? Does BMW or Mercedes wait that long to offer M and AMG models? I could go on.

However, even with all that, I beleive Audi is raising the bar in carmaking and the A8 is simply outstanding. I saw it at the NY auto show and I plan on seriously considering it next year if I can manage to trade in the rest of my lease! Oh how I love and despise those 4 rings!

2002 A6 4.2 Sport

 

a time compared to BMW 745i and M-B S500 why did they think the Phaeton was going to sell.

 

Agree.

 

In general, I believe Audi has really NEVER achieved within VW the lofty position it SHOULD HAVE. VW seems obsessed with "hedging its bet" in this regard with Phaeton being the perfect example.

 

Hmm, $900m to gross $250m in year one? Yikes.

 

Seat, Skoda, Lambo, Bentley, VW, Audi, etc. etc. etc. US, Mexico, Brazil, etc. etc. etc.

Too many kids to keep track of. And if Audi is perceived as doing OK as it is, or if its people don't squeak enough, they don't get what the others get.