Why was the Volkswagen Phaeton discontinued?
2 Answers
Introduction to the reasons for the discontinuation of the Volkswagen Phaeton: 1. Extremely low production volume: The Phaeton not only had extremely low production but also very poor sales, resulting in huge losses for Volkswagen. Due to Piech's overly stringent technical requirements, the Phaeton's production was extremely low, with a daily output of only about 8 units. Its annual sales were less than 1/10th of the Mercedes-Benz S-Class, and from production to discontinuation, its sales never met the targets, while manufacturing costs remained high. 2. Slow product updates: The Phaeton had slow product updates, high prices, and declining product competitiveness year by year. Apart from poor market performance, the Phaeton only underwent two minor facelifts during its 14-year product cycle, lagging two generations behind its competitors, with clearly insufficient product strength. At the same time, high costs ultimately led to the Phaeton's high market price. 3. Impact of the emissions scandal: Volkswagen faced huge fines due to the "emissions scandal," leading to the cancellation of low-profit projects. Additionally, in 2015, Piech left Volkswagen, and the Phaeton lost its last protector, making its discontinuation inevitable.
I think the main reason for the Phaeton's discontinuation was poor sales. As Volkswagen's flagship sedan, it was entirely handcrafted in the Dresden Glass Factory with shockingly high costs—each car sold for hundreds of thousands. However, Volkswagen's brand positioning is mass-market, not luxury, which created an awkward mismatch. Sales never took off, with only a few thousand units sold globally per year, and the North American market was outright abandoned—it just wasn't cost-effective. Now, Volkswagen has shifted resources to electric vehicles and SUVs, like the more popular and quicker-to-profit ID series. Additionally, internal competition with the Audi A8 (sharing platforms but with Audi’s premium positioning) made it tough for Volkswagen to compete in the luxury segment. In short, the company had to be shrewd—cutting loss-making projects to fund other ventures, or cash flow would become a problem. By the way, newer models like the Touareg SUV, better suited to Volkswagen’s mass-market appeal, proved this decision wise.
