Volkswagen Temporarily Shutters Showcase Phaeton Plant To Save Money

Aaron Cole
by Aaron Cole
volkswagen temporarily shutters showcase phaeton plant to save money

Volkswagen will suspend production at its small, flagship facility in Dresden that produces the Phaeton for at least a year, Reuters reported ( via Automotive News).

The small, boutique plant will be shuttered to help cut costs for the automaker, which announced it would scale back some projects to help it pay for its massive diesel scandal. According to the report, development of the Phaeton cost roughly $1.1 billion and the sedan hasn’t met sales targets since it was introduced 2002.

Reuters reported that the plant would be shuttered for about a year, beginning in March, and would be retooled to build an all-electric Phaeton by about 2019.

The Phaeton slowdown is one of the few instances Volkswagen has publicly admitted that its costly diesel recall has taken a toll on finances.

Since the automaker revealed in September that 11 million of its cars worldwide cheated emissions tests, Volkswagen has maintained that it would scale back its once-massive research budget, and find other ways to trim costs, but very little has been made public. In November, the automaker said it would save about $2 billion by eliminating some trims and special editions of its cars.

However, in his first public speech since the scandal, new CEO Matthias Müller said the company was working to protect jobs and made clear that it would spend more on electric vehicles in the future.

The Dresden plant employs 500 workers, according to the report. Roughly 300 workers help build the Phaeton and may be reassigned to Volkswagen plants.

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  • Mjz Mjz on Dec 17, 2015

    This is why VW does not do well in certain markets, most notably North America. The Phaeton has always been a complete and utter flop. They are (will be) having dire financial issues because of the diesel scandal, yet they still INSIST on wasting money on another VW luxury sedan that no one will buy. It's maddening!

    • PandaBear PandaBear on Dec 17, 2015

      This tells you how bad the politics is inside the company. I've only seen this kind of nonsense because VPs want to keep their influence and justify their existence and empire by keeping legacy projects.

  • LuciferV8 LuciferV8 on Dec 17, 2015

    The Phaeton is a wonderful car, but it isn't a wise business decision for VW. I don't like that they have to cut it, but it is something that must be done.

  • Corey Lewis Corey Lewis on Dec 17, 2015

    Talk about a waste of resources. You already make the Bentleys and the A8s somewhere else. Just bother with those two.

  • Craiger Craiger on Dec 17, 2015

    Can someone explain to me the Phaeton hate? I know it never sold well (too much $$$ for a VW) but by all accounts it's a magnificent car, if you want that type of car, of course.

    • See 3 previous
    • Asummers Asummers on Dec 19, 2015

      @callmeishmael 2004 Phaeton owner here. I know it's anecdotal, and I know plenty of Phaeton owners have had transmission failures etc. But mine has needed nothing more than a fuel pump and rear wheel bearings in 153k miles ( other than fluids, tires and brakes and scheduled timing belt at 80k) Even the original brakes lasted 115 K. Still original squeak and clunk free suspension. The interior still looks new with no care. It is parked outside and washed once a year at this point. Bought for usd 13500 in '09 with 84k on the odometer, could probably get 4-5k for it today. Coupled with the 8000 insurance payout I got for massive hail damage in '11 I've been driving this sweet car ( at least from 20 feet away, or sitting inside it) for effectively free for going on 7 years. I guess what I'm trying to say is I've been damn lucky and this has been a damn good car. They aren't all bad.