today.reuters.co.uk
VW drops Phaeton - but only in USA
Mon 14 Nov, 2005, 17:13

In a symbolic move, VW has admitted defeat in the world's largest
market for luxury cars.
The Phaeton is being withdrawn from the USA having never near its
original 5,000 per year sales target: this year, it will sell less
than 1,000. The move is important because, without the US market, it
is virtually impossible to make money on a luxury car. Certainly,
European sales are hardly compensating for the failure in the USA -
the Phaeton is struggling in nearly all markets. VW still seems
committed to expensive saloons and is now planning a Mercedes CLS-
style model to go above the Passat, but it will need to be light
years ahead of the Phaeton in terms of customer appeal.
With losses in the USA of $1 billion a year, the American operation
is trying to reposition VW as the mainstream value brand it was 30
years ago.

jimt