2005 Volkswagen Phaeton Test Drive

VW Deluxe

A car that virtually nobody wants turns out to be a delightful surprise.

In February, only 69 Americans purchased the flagship Volkswagen , compared with 152 last February. These sales are terrible for the product of a high-volume, mainstream carmaker. They seemed that way at this time last year, and now they have declined by 55%. Dealers are routinely offering Phaetons for $10,000 under the sticker price.

How could Volkswagen have made such a mistake? Some say nobody wants a fancy Volkswagen, but the company's luxurious Touareg sport utility vehicle has been a success. The other popular theory is, "Why buy a $70,000 Volkswagen when you can buy a car from the company's upscale Audi subsidiary?"

Thing is, we recently drove the Phaeton and found it to be better than any Audi, with the possible exception of the flagship A8 sedan. In fact, we went straight from a Phaeton into a new Audi A6 sedan, and found the latter to have an interior that is far less sumptuous and intuitively laid out, and driving dynamics that feel almost clumsy in comparison.

The problem is not the quality of the Phaeton -- it's the quality of the VW badge. And it's the mediocre reputation Volkswagen dealers have, especially when compared with the better reputation of Audi dealers, who are located right across the showroom floors. But perhaps more than any other factor, the Phaeton's sticker price is driving people away.

VW is known for cheap, populist cars, and always has been. Put it this way: if General Motors decided to build a $70,000 Saturn, would you buy it? Neither would we.

This is a shame, though, because the Phaeton is a great car. Read on to find out why.