Volkswagen AG is speeding up a facelift of the $88,000 Phaeton sedan in time to unveil the model at the Beijing auto show next month and target China's millionaires, said two people familiar with the matter.
VW, which withdrew the Phaeton from the U.S. in 2006 after a sales flop, is designing new front and rear sections, an interior upgrade and a wider selection of engines for the car, said the people, who declined to be identified because the revisions aren't public. The model will be presented on April 23, before the start of the Beijing event, instead of in the second half as previously planned, they said.
The Phaeton, named after the son of the Greek god Helios, went on sale in 2002, with development costs exceeding 1 billion euros ($1.3 billion). The model was part of then-Chief Executive Officer Ferdinand Piech's effort to take the VW brand into the luxury market against Bayerische Motoren Werke AG and Daimler AG's Mercedes-Benz. The car never met an annual target of 20,000 deliveries, and sales last year fell 27 percent.
"The VW brand simply doesn't appeal to rich buyers," said Willi Diez, head of the Institute for Automobile Industry in Nuertingen, Germany. "Technologically speaking, the Phaeton is a great car, but it doesn't undercut rivals' prices enough to attract sophisticated shoppers."
Peter Thul, a spokesman for the VW brand at the company's headquarters in Wolfsburg, Germany, declined to comment on the Phaeton's revamp.
Mercedes, BMW
The Phaeton's least expensive version, costing 65,800 euros, is a six-cylinder car with a 240-horsepower diesel engine, according to Volkswagen's Internet site. The price rises to 125,600 euros for the 12-cylinder model with a 450-horsepower gasoline engine and longer-wheelbase option.
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