2006 Volkswagen Phaeton
Expert Review

Many older Americans probably will have a hard time accepting a Volkswagen sedan that costs more than $64,000 because this German automaker still has an economy car image. After all, its iconic Beetle economy model was the most frequently seen foreign car in this country for decades after being introduced here in 1949.

Volkswagen isn't after the crowd that associates Volkswagen with strictly economy cars. It's moving upscale and aiming vehicles at younger buyers who weren't even around when the Beetle was the import king.

The New Beetle doesn't have the spartan image of the old Beetle, and younger motorists mainly associate Volkswagen with newer, more upscale, fun-to-drive models such as the Jetta and Passat sedans—not to mention the Touareg sport-utility vehicle, which is hardly cheap with list prices from $34,900 to $40,700.

Groundbreaking Model
The Phaeton ("fayh-ton") is the largest, most powerful and most costly Volkswagen car model, being 204 inches long and weighing 5,194 to 5,399 pounds. It's also the first really roomy "ultraluxury" Volkwagen sold in America, besides being the automaker's first entry in the high-end German car market. It competes with illustrious cars such as the BMW 7-Series, Mercedes-Benz E- and S-Class models and the Lexus LS 430.

Volkswagen annually sells abut 400,000 vehicles in America, it expects to sell "3,000 to 3,500" Phaetons here each year through its 600 U.S. dealers. (Only dealers who exclusively sell Volkswagens initially get the Phaeton.)

A Stretch?
"With such a relatively small number of sales, the Phaeton should do well, although it's still a stretch for Volkswagen," said veteran auto analyst Ray Windecker, of Michigan's American Autodatum.

Time will tell, but Volkswagen is moving upscale with future models, including its next-generation Jetta and Passat that are due in 2005. It needs a top-line car such as the Phaeton for those moving up from lower-priced Volkswagens.

Volkswagen also says the Phaeton will attract folks who like German car engineering and don't feel the need to impress others with the brand cachet enjoyed by automakers such as BMW and Mercedes-Benz.

Lacks Cachet
The Phaeton lacks such cachet, which makes its resale value a question mark.

Most Volkswagen dealers feel the majority of Phaeton customers will lease the car, which generally is the case with autos costing more than $60,000.

Long-Term Strategy
"Volkswagen has a long-term upscale strategy and is being brilliant by offering the Phaeton. It'll become more desirable as time passes," says veteran auto dealer Bill Jacobs, who sells Volkswagens and a variety of other new cars in the Chicago area, along with costly classic exotic sports cars.

Volkswagen dealers said shortly after the Phaeton debuted that many potential Volkswagen buyers in their showrooms didn't know the car even existed and were surprised by its high pricing, large size and roominess. Some dealers said parking lot valets couldn't believe it carried the Volkswagen nameplate.

The dealers also said that most initial, potential Phaeton buyers were people such as car buffs and those who heard about it via media reports. Such folks want something different and deliberately seek out the car, the dealers said.

Two Powerful Engines
The Phaeton V8 produces 335 horsepower. The costlier version has a 420-horsepower "W12," which is two V6 engines fitted neatly together in a double-V arrangement. That results in a very compact design, compared with a conventional V12 engine.

The 4.2-liter V8 works with a 6-speed automatic transmission, while the 6.0-liter W12 transmits power through a 5-speed automatic. Both transmissions are responsive and have a manual-shift feature.

Low Fuel Economy
High fuel economy shouldn't be expected with such a big, powerful car—despite the Volkswagen nameplate. The Phaeton delivers an estimated 15 mpg in the city and 22 on highways with the V8 and 12 and 19 with the W12. Both engines call for premium fuel.

The Phaeton is fast, despite its size and weight. It does 0-60 mph in 6.7 seconds with the V8 and in 5.9 seconds with the W12. Top speed is held to 130 mph by electronic engine controls.

Fast and Safe
This is no sports sedan. For example, its steering is too light for such a car. However, the Phaeton steers, handles and brakes well enough to allow safe, fast trips.

As might be expected, the Phaeton is packed with luxury and convenience items—along with such safety items as front and rear torso side airbags and side-curtain airbags.

An air suspension helps provide a very smooth ride and automatically adapts to driving conditions, road surfaces and vehicle speeds. The suspension has two driver-adjustable heights and comfort, basic, sport 1 and sport 2 shock absorber settings.

All-Wheel Drive
The Phaeton also has standard all-wheel drive for better road grip—making it and the Audi A8L the only luxury cars with such a standard drive setup. The Phaeton also has an anti-skid/traction-control system.

Styling is conservatively handsome, but the right colors are needed to make the Phaeton stand out. For example, black and silver make the car look much better than my test Phaeton's bland blue paint. Most Volkswagen dealers I talked with said they had black and silver Phaetons on display.

Posh Interior
There's plenty of space up front in the quiet, tastefully luxurious wood-and-leather interior, which has first-class materials and workmanship. The large front seats are very supportive when zipping through curves. Some may complain that the dual front cupholders are too small for larger beverage containers, but they have unique pop-up covers to give the console a more integrated look.

There's limousine-style space in the rear, although the middle of the nicely contoured back seat is stiff. Individual rear reclining bucket seats are available. Nifty!

Awkward Window Controls
Outside mirrors are commendably large. But the driver's power window controls are too low and forward on the door panel. Secondary gauges are too small. Also, the large shift lever blocks some console controls. Audio, climate and navigation functions are monitored via a dashboard screen and controlled by buttons. Some adjustments call for too much effort.

The nicely finished trunk is large, with a low, wide opening and power lid. However, even those with long arms will find that a stretch is needed to reach objects at the back of it.

If Volkswagen is determined to get a first-class image, the refined, masterfully designed Phaeton will go a long towards helping the automaker get it.