Volkswagen's Phaeton could not exactly be described as a run-away success. The German carmaker planned to make a modest 20,000 units, but only managed to sell a quarter that amount. But someone in Wolfsburg must have gotten an "if at first you don't succeed" fortune cookie, and they're determined to give it another shot.

The next Phaeton, as we've reported previously, will save considerably on development costs by sharing its underpinnings with the next A6 from corporate cousin Audi. This, however, is no mere speculation: it comes straight from the mouth of CEO Martin Winterkorn. The end result will be a Phaeton smaller than the one it replaces, bringing costs down and bringing it slightly closer to the top-end Passat to help close the enormous gap in the Volkswagen model line-up.

The current slow-selling Phaeton cost Volkswagen a bundle to develop, but all was not lost as the platform ended up providing the basis for the more successful Bentley Continental range, with its coupe, cabrio and sedan variations. What will happen with the next Continental, you ask? Sources suggest that it will take its underpinnings from the latest Audi A8.

All in all this amounts to a change of direction for the German auto group, which has a history of investing heavily into new models which compete with offerings from their own subsidiaries.

[Source: Motor Authority]

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