Last post on Jul 13, 2012 at 2:36 PM
You are in the Volkswagen Phaeton
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Volkswagen Phaeton, Sedan
#869 of 1691 VW throws money at Phaeton. . .
May 13, 2004 (11:16 am)
. . .all the write ups pertaining to the Pheaton indicate that VW plans to "subsidize" the Phaeton for at least 4 years. They made a commitment to the transparent factory, to VWoA and to their shareholders.
They set expectations: "we're moving on up, it won't happen overnight and we have to spend it to make it -- give us 7 years, we'll build a factory, design a 'super car' and evolve it over four model years -- then it will be profitable."
If you're in for a penny, you'd better be in for a pound. Dr. Piech is gone now -- but when he was the head cheese, he came up with the plan to move VW up, begin a deliberate differentiation of VW from Audi (and we aren't there yet, it is an evolutionary process) and improve quality.
I don't know how things are progressing frankly -- it would appear that ground is being covered in all of these areas. Len Hunt, now VWoA's head cheese (no pun intended) was recently moved from VP of AoA to VP of VWoA -- it seems he is tackling a quality issue head on (see yesterday's USA today Money Section, which I think is on line). VW in Germany is reviving and hopefully revitalizing the product line and moving it upscale.
Frankly, I don't know if they can "wait this long" but I think VW will be transformed by the time the 2007's are hitting the market. Transformed, but not finished (transforming). But finished if they don't transform -- if you get my drift (uh, I am speaking only of the US market).
I read, speaking of Audi, that LAST year, Audi sold 84,000 cars in the US and 60,000 in China. Moreover, the current run rate can lead you to conclude that China will soon be (if it is not already) as important as the US and if the China Revolution (economically speaking) continues, China may become Audi AG's biggest market outside of Germany.
I assume VW wants to sell Phaetons in China too.
The US may always be psychologically relevant, perhaps even a bellwether -- but it will soon be a minority player compared with Asia.
Considering the potential market, I would say the willingness to keep throwing money at the Phaeton has not even begun to cool.
P.S. there is only really one way to get one of these things -- lease it for a term of equal to or less than 39 months with as little out of pocket as possible.
I guess, if you could get zero or super low financing, well, possibly, but I always look at buying cars like investing in ice sculpture on the Fourth of July in Texas -- before you get it paid for, it's gone, worthless. The Phaeton is certainly a better "investment" than an ice sculpture sitting in the hot Texas sun, but not by much.
Why on earth would you want to consider taking the depreciation hit on one of these high-buck cars (Audi, BMW, VW, Mercedes)? All of them have proven to be only remotely sane "purchases" if they are low milage, previously owned and no more than 2 model years old.
Now, I agree, therefore, that a 2004 $70K Phaeton purchased in model year 2006 -- as a used car -- might be financially "more" sound -- but I think I would still, even then, consider a pre-owned lease deal for, hmmm, 24 months.
My Audi A8 sales guy can't remember EVER a customer buying one -- he does remember ONE RS 6 being sold -- CASH.
I wonder if the 2 Phaetons sitting at my local VW dealer for 7 months will have a huge cap cost reduction "incentive" in a couple or three months -- I'll bet the lease then would be quite interesting too.
#870 of 1691 VW throws money at Phaeton. . .
May 14, 2004 (7:00 am)
They need to have free sodas and cookies at the dealers to be competitive with Lexus and Mercedes-Benz.
P.S. My salesperson didn't even call me after my visit. It's no wonder they don't sell.
May 14, 2004 (8:56 am)
It is my understanding that the new B6 Passat will not hit these shores for at least year or more; so incentives should continue for quite a while.
Regarding the W12 question...The new brochure's focus on the V8 is due to the fact that there has been very limited interest in the 6.0L engine, at least up to this point in time. Fact
of the matter though...this may change next year
if the 6 Speed Transmission becomes available.
For today, the W12 with the 5 Speed is basically
just an extraordinary long range cruiser...Think
chauffeur and 130 MPH Berlin to Frankfurt...
#872 of 1691 US as a minor player??
May 14, 2004 (11:24 am)
Not likely anytime soon particularly for high end. Toyota and Lexus probably in best position for China which will be a critical market. US and Europe are where the per capita money is though and will be the bellweathers. China is the growth segment.
Still waiting to see my first Phaeton on the road.
#873 of 1691 Re: US as a minor player?? [ljflx #872]
May 14, 2004 (1:06 pm)
If my statistics are not accurate, I will go so far as to say that at least the spirit of them is.
The customer acceptance and purchases of Audis has grown to near partiy (and that is all I have stats for, more or less, in my head -- over time the market will, I presume, absorb the VW Phaeaton [class] too, in China). The run rate of sales in both China and the US for Audi products is ~ 7,000 units or less per month on average. The growth of sales by units in the US has been steady but not very steep. The similar growth in China has been steeper. The population in China and the population in the US while not yet relevant -- in total numbers -- is relevant as there appears to be a growing Chinese upper class and apparently the stirrings of a middle class. Even if the percentages in these classes of total population are much lower in China, well the sheer size of the Chinese market makes Audi (and VW, by extension) take notice.
Assume that Audi ultimately reaches [sales of] 90,000 units in the US over the next couple of years and, barring an economic overheating and total meltdown in China, grows to 100,000 units in China. Consider that it is possible that Chinese sales, in units, may continue to grow and outpace the sales in North America -- Audi will certainly "pay attention" to China as a major market for its products.
Perhaps minor market is too strong of a phrase -- but at least consider that Audi will want to make its Chinese customers happy.
To the extent that customers in China may want to emulate American (or Western, perhaps to be a bit broader-minded) tastes, America will still be very important to Audi (and VW and other Euro brands). I am reminded of the Frank Sinatra song New York New York, for I can assume that Audi and VW will say, about America, "if I can make it there, I can make it anywhere. . ."
China's potential to be Audis (and VWs) biggest customer is, I am certain, not lost on them.
Ultimately, in sheer numbers, the US/North America will be a smaller unit sales market, and in that fashion may be said to be a minority.
#874 of 1691 markcincinnati
May 14, 2004 (2:42 pm)
So you meant China from an Audi/VW point of view? I had read it as an overall automotive point of view and thus was not referring to Audi or VW in my post. The increasing tourist and trade boom between China and Japan and the proximity for factory building etc. just bodes very well for Toyota in the future. Right now though VW is the brand to beat over there. Audi's are just not big sellers here and I'd bet the concentration of their sales is high in the upper midwest and even more so in the Northeast most particularly the New England area. I'm amazed at the lethargic sales of the A8. One of the best looking cars on the road (probably the best of the large lux sedans) and not desired. I'm an LS or S buyer but if you hypothetically could eliminate those two - I'd run right to the A8 over the 7 series or Jag. And if the Phaeton rides smoother than the A8 and had a track record it would probably be at the head of the class for me.
#875 of 1691 phaeton selling poor so farr
May 16, 2004 (4:32 pm)
well ,if you go back 5 months when i first posted you will see that my comments are on the mark.
the recent press release and p.r. effort/news conference from vw h.q. indicates that the golf intro in europe is awful.
red ink at vw is flowing.
they took this lovely car two notches up market and they increased prices and boom the floor fell out from under them.
and,if you read the phaeton info. ,more of the same with words like --dissapointement---,etc....from vw executives.
not only in europe but also in the u.s.
reason given vary from poor overall reliability record for vw to brand image vis a vis vw-luxury cars.
i wanted to buy a phaeton,but common sense prevailed...and went with the lexus ls which my wife now drives....even the euro suspension is no fun.
i am still looking for the perfect car and the more i drive and test the worst it is.
waiting for the acura rl....who knows ?
the s 500---too many problem areas ,mostly small.
will try out the new maseratti quatroporte,but having owned italian cars and motorcycles before,i am skeptical.
you have not lived until you are doing triple digits at nite and .............phufffffff,the engine quits......
only to re-start 4 hours later at 4 a.m.
never knowing what happened.........
the phaeton is still a fantastic looker ,and that interior is incredible.
but everything else is just not there.
maybe if they drop the price or lease i may swing one just to own it for a year or two.and give it back.......get it out of my system.
but ,their big problem ,specially here in florida is the uneducated,obnoxious sales people.and the rip-off service dept...........
they just cannot match lexus or mb,or other high end cars.....except in service dept. rip offs.
#876 of 1691 Re: phaeton selling poor so farr [ffb13 #875]
May 17, 2004 (9:18 am)
There are two Phaetons at my local VW dealer -- and they have been there soooooooo long, I think the paint is starting to fade (just kidding).
I am not in the Phaeton market, even for $50K -- but, $50K, I might "pause a moment" to consider it -- I cannot imagine that these two cars can sit for months (of course the dealer does NOTHING except keep them completely out of sight hidden behind some Passats at the back of the lot. And this is another instance of more's the pity.)
Additionally, I haven't seen a Phaeton TV spot in months either -- just like they did with the W8 Passat.
Just like Audi does / did with the allroad. . .
TV spots for the BMW and Mercedes can still be found -- as can product placements in TV shows for these Germans. The last product placement of an Audi was the show Boston Public -- the lawyer turned teacher had an A6 4.2.
So, the slow sales of the Phaeton, I would say I agree with -- but when I look at the Cincinnati dealer support, it is no wonder. But then again, if that $66K MSRP Silver Phaeton is discounted heavily, I guess it may make someone (like me) at least consider it -- currently I am, without actually seeing product, "considering" the 2005 A6, Acura RL, Chrysler 300C AWD and the Cadillac STS-AWD. The Phaeton, due to its size seems out of my league (and since I am limiting my search to the $42 - $52K price range, that is a factor).
Anyway, I am just not certain that the current crop of VW dealers knows what to do to effectively market a Phaeton. I am not suggesting that the car is perfect -- I am saying that the Phaeton, compared with its intended rivals is a bargain -- and probably about to become even more of one.
May 17, 2004 (10:41 am)
Although there are currently no TV spots we can be found gracing the back cover of the current
"Vanity Fair" and in the May 17th issue of the "New Yorker" we get the inside cover and first page...
Advertsising and Marketing budgets are being directed at Passat, Jetta, and Touareg...Passat & Jetta are both getting complete redesigns for 2005...B6 Platform for Passat and A5 Platform for Jetta; so the current inventories must go!!!
Thus the emphasis. Look for another PHAETON TV campaign late 3rd quarter into Q4.
Numbers from the "other place" show PHAETON Sales
for the year as 152/Jan., 152/Feb., 149/Mar., and 173 in April. Not too bad for a rather subdued launch...And I would suspect that the custom ordered 4 Seaters and custom paint & leather orders in the pipeline will keep the numbers at the same level or a bit higher as this quarter progresses.
May 17, 2004 (8:39 pm)
" The last product placement of an Audi was the show Boston Public -- the lawyer turned teacher had an A6 4.2."
Yep, Ronnie Cook aka our wannabe senator's (IL) ex-wife Jerri Ryan. Good call. Fox is no-class station, they yanked what was in my opinion one of the best TV shows in years, right off the air with no finale or anything. Uggg.