VW suffers major blow to U.S. up-market strategy, will pull Phaeton

Volkswagen is admitting defeat with the Phaeton, and plans to pull the slow-selling luxury sedan from the U.S. market next summer. The executives decided Volkswagen will focus on being a volume player in the U.S. market instead of trying to move up-market, spokesman Hans-Gerd Bode says. "We are a volume producer, and let's go in this direction, beginning with the U.S. market, where we are losing a lot of money," Bode said. Chris Curran, a Volkswagen dealer in Stratford, Conn., aptly points out that the Phaeton represented too big a jump for traditional VW buyers to make. At the same time, he says, luxury buyers did not gravitate to the car. "People in that high-price range are buying prestige and image, and want the logo to represent that."