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 The Phaeton is being withdrawn from the USA having never near its original 5,000 per year sales target: this year, it will sell less than 1,000.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 |
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