VW Delays Launch of Updated Phaeton Luxury Sedan

Volkswagen AG has delayed plans to launch an updated version of its slow-selling Phaeton flagship sedan as it looks for ways to cut costs on production and materials, sources tell Bloomberg News.

The €89,700 hand-built car has been a personal project of former VW Group Chairman Ferdinand Piech, who stepped down in April. He aimed for a powerful luxury car to compete with Audi's A8 flagship.

But critics say the car has failed to build strong sales because it doesn't fit VW's mainstream market image. Last year worldwide demand for the Phaeton fell 30% to about 4,000 units, making the car VW's lowest-volume model by a wide margin.

Bloomberg says VW's interest in revisiting the program signals the company's stronger emphasis on profitability. Some analysts predict Piech's departure increases the likelihood that VW will cancel the Phaeton.