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VW addressing Phaeton failures with next-generation car

As Volkswagen prepares to relaunch its flagship Phaeton sedan in the U.S. market, the German automaker is looking back on the failed first-generation car to determine what about it didn't strike a chord with U.S. consumers in order to prevent a repeat performance.

"We did a lot of things wrong with the car," Stefan Jacoby, CEO of the Volkswagen Group of America, told Automotive News. "It was too high-priced, and at the beginning we had some quality issues that we were not fast enough to solve."

But VW is prepared to address the problems that plagued the Phaeton that launched in the U.S. in 2003. According to Jacoby, the new Phaeton -- which will likely bow in 2010 or 2011 -- will sticker for about $55,000 and will ride on a shorter wheel-base than the Audi A8.

The last generation car was intended to go head-to-head with the BMW 7-series and listed for between $70,000 and $100,000. Because of the steep price of entry, U.S. sales were far less than expected. VW planned to sell 5,000 Phaetons annually, but only managed to move 3,354 examples in the five years the car was on the market.

Despite the car's lukewarm reception in the U.S., the next-generation car will use the same Phaeton nameplate.