"Mistake" is a word often used in association with the Volkswagen Phaeton. Some say it was a mistake to make it in the first place; some say that it was a further mistake to launch it in the American market. However, Volkswagen says it was a mistake to withdraw it from the US marketplace. This from the mouth of Stefan Jacoby, CEO of Volkswagen of America, echoing previous remarks from VW chief Martin Winterkorn.
Jacoby makes a tough argument, considering how poorly the Phaeton performed in the US. Introduced in late 2003, it sold just short of two thousand units in 2004, and in the two years after, it failed to sell more than a thousand before being pulled. Compare that to the Bentley Continental, which shares its underpinnings with the Phaeton, yet has been selling like six-figure pancakes despite yet costing two-three times as much. The conclusion was that, no matter how good the car, American consumers were not prepared to pay big bucks for a VW, and the gap in Volkswagen's sedan range stretching from a $39k fully-loaded Passat to the $64k base Phaeton was just too large. However several developments will reduce that gap: the Passat has gotten bigger, the higher-end Passat CC was introduced, the next Phaeton is anticipated to go down-market compared to the current model, and Volkswagen is also preparing another model to fit in between. A more cost-effective Phaeton could stand a better chance in the American market as the flagship in a range of luxury sedans than it did as an island floating off the shore of Volkswagen's core line-up.
[Source: Automotive News - Sub. Req.]