By on December 17, 2015

Volkswagen Phaeton

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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31 Comments on “Volkswagen Temporarily Shutters Showcase Phaeton Plant To Save Money...”


  • avatar
    DeadWeight

    “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.”

    Fools!

    Everyone knows diesel is where it’s at!

  • avatar
    GermanReliabilityMyth

    This is a huge loss for automotive enthusiasts everywhere. However, its reassuring to see Volkswagen is taking their circumstances seriously. Once they weather the storm, I’m sure we can look forward to the continued production of this engineering tour de force. It’s unfortunate that we may never see a new Phaeton with the W12 again, though.

    • 0 avatar
      sportyaccordy

      Wait, are you serious?

    • 0 avatar
      qfrog

      Is there any enthusiasm for the Phaeton? The car always felt to me like VW’s way of having their own large sedan on the cheap as it was quite obviously derived from A8 running gear and shared quite a lot with the Bentley because one steel bodied large sedan isn’t enough. It isn’t enough because VW always likes to make multiple versions of the same car if they think they can fit that car under one of their brands… they try to. IMO the only one of the three sedans that I suspect to sell in any sensible volume is the A8.

      • 0 avatar
        DeadWeight

        I’m waiting for the Phaeton’s reliable and (now) necessary chilled center console and motorized vents and cupholders to trickle down to even Kia Rios.

        Once you experience life with the ease of motorized cupholders, there’s no going back…

        • 0 avatar
          GermanReliabilityMyth

          Wait until piston-damped ashtrays reach the masses. The world will never be the same again.

          • 0 avatar
            DeadWeight

            If any vehicle can’t match the Phaeton’s ability to maintain an interior temperature of 22 °C (72 °F) during episodes of exterior temperatures as high as 50 °C (122 °F), what good are they?

          • 0 avatar

            @ DW

            I also heard a Piech requirement was for all VWs by 2010 to be able to drive no more than 5 miles at 55mph while maintaining a coolant temperature of no less than 290°F.

      • 0 avatar
        whynot

        “Is there any enthusiasm for the Phaeton?”

        I love the Phaeton! I would never buy one (reliability and all that), but it is a technological tour de force and I love its conservative, unassuming styling.

        Would love to see another one, although I know that VW shouldn’t go down that rabbit hole again.

  • avatar
    pleiter

    …….an all-electric Phaeton by about 2019……

    To capture ALL of the eligible Star Trek customers, the new model is to be named the “Photon Torpedo”.

  • avatar

    I hope the $1.1b includes the developments costs of the accompanying D1 Bentley models – you know – the ones that actually sell.

    • 0 avatar
      Kyree S. Williams

      It’d be weird if it didn’t. Aside from the individual body-shell and maybe those peek-a-boo vents, nothing on the Phaeton wasn’t also on the Bentleys, or used within the other VW Group models. The fiber-optic electronic network was probably one of the most costly things on the early models. The later updated models of the D1 cars (2010 for the Phaeton; 2012 for the Continental GT and Continental Flying Spur) feature interfaces that are borrowed directly from the VW Group parts bin. You’ll find the instrument cluster screen in the newer D1 cars to be the same one used in many VW and Audi models, including the Touareg; ditto for the modified RNS-850 navigation/infotainment system.

  • avatar
    derekson

    They should use this plant to build something that can actually pay the costs, like Bugattis or Bentleys or something. Maybe the Audi R8?

    That plant is a marvel honestly, but it needs to build a car they can sell for a high enough price to actually fund it rather than a $60-80k VW.

    • 0 avatar
      Kyree S. Williams

      They’ve done that before. When the Continental Flying Spur (that’s the sedan version, up to 2013) came out for MY2005 or 2006, there was such demand that whole examples had to be completed in Dresden, alongside the Phaeton…though none of those units was for the UK or US markets. Even now, the Continental GT and Flying Spur bodies are completed in Germany, then shipped to Crewe.

  • avatar
    sportyaccordy

    This is about as “temporary” as Bobby Jindal’s campaign suspension.

  • avatar
    Corollaman

    keep it closed, save your money, no one is gonna buy them anyway

  • avatar
    Pch101

    The electric Phaeton was announced a couple of months ago, so that is nothing new. What is new is the cancellation of the gas model.

    It sounds as if VW wants to compete against Tesla, a company that has done a fine job of selling a low volume of cars without turning a profit.

    • 0 avatar
      hreardon

      At the risk of sounding like a cheerleader, I’m pretty confident that once BMW and Audi get a little more experience with hybrid and eventually fully electric mobility that they’re going to eat Tesla’s lunch at the luxury end of the market.

      I sense that near-term the plan is to focus on selling very efficient hybrid-electric models before developing the competency to really push profitable purely electric models. A3-eTron is the first salvo, the oft-rumored e-quattro which combines a downsized gasoline engine with electric units will be next, along with more advanced materials and techniques to continue to reduce weight.

      We don’t really need (nor does the market yet demand) fully electric vehicles just yet. If makers like Audi and BMW keep pushing forward with weight reduction, gasoline efficiency and then efficient hybrid systems to bridge the gap they’ll be able to outlast Tesla’s shareholders.

      • 0 avatar
        Pch101

        In the scheme of things, beating Tesla doesn’t mean much. Tesla sells very few cars and can’t make money doing it.

        VAG et. al. might be able to make money on similar volumes if the price points are high enough, but the batteries are still too expensive and there isn’t much opportunity to amortize R&D costs due to the low volume. It’s not really a coveted prize, but for the fact that they are compelled to produce a certain volume of EVs due to compliance issues in Europe and elsewhere.

      • 0 avatar
        derekson

        “At the risk of sounding like a cheerleader, I’m pretty confident that once BMW and Audi get a little more experience with hybrid and eventually fully electric mobility that they’re going to eat Tesla’s lunch at the luxury end of the market.”

        I’ve been saying this for ages. BMW/Audi/Merc and especially Porsche are going to crush Tesla at its own game once they become involved (this will also come as it becomes possible to make a profit on these cars). Tesla can’t develop enough vehicles at once to compete with these guys. The Model S already looks stale and we don’t even know anything about it getting a replacement. And its interior is basically at the level of an Accord Touring, not a competition for a new MB interior or Audi interior in terms of luxury feel and appearance.

  • avatar

    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!

    • 0 avatar
      PandaBear

      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.

  • avatar
    LuciferV8

    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.

  • avatar
    CoreyDL

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

  • avatar
    craiger

    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.

    • 0 avatar
      callmeishmael

      IIRC, the early Phaetons suffered a lot of problems. They acquired the reputation of being luxo-lemons here.

      • 0 avatar
        CoreyDL

        Jack had two Phaetons, so I’m surprised he hasn’t shown up to give a little mini opinion.

      • 0 avatar
        asummers

        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.

    • 0 avatar

      Imagine the general fit and finish and electrical build quality of an ’02 Passat in a car that not only looks the same but costs several factors more to fix.

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