Volkswagen reveals stillborn second-generation Phaeton flagship

When BMW launched the 3 Series Compact and Mercedes-Benz introduced the A-Class in the 1990s, it was seen as a direct threat on a segment traditionally held by the Volkswagen Golf.

In response, Volkswagen Group chairman Ferdinand Piëch decided to move in on territory traditionally held by BMW and Mercedes-Benz – large luxury sedans.

Though Australia never received the vehicle, the Phaeton – based on the same platform as the Audi A8, Bentley Continental GT, and Porsche Panamera – received mixed reviews, and sales never quite met expectations.

As part of the 20th anniversary of the launch of the Volkswagen Phaeton, the German car giant has revealed the second generation of the model that never was.

Less than a year after the diesel emissions scandal known as ‘Dieselgate’ became global news, Volkswagen’s Supervisory Board made the decision to focus the company's efforts on electric cars, and the decision to end production of the first-generation Phaeton.

With it went plans for a second generation, which made it to the stage of this “near-series prototype” – showing off a handsome and sophisticated exterior design with very tight panel gaps and a high level of detail.

Inside is perhaps more interesting – the Phaeton was set to debut a curved display, a feature that was eventually introduced on the third-generation Touareg in 2018 as the ‘Innovision Cockpit’.

Wooden panels covered the power-opening air conditioning vents, while thick glass helped to insulate the interior against wind noise. It was a luxury saloon created to be a worthy alternative to the BMW 7 Series and Mercedes-Benz S-Class.

While Volkswagen decided not to proceed with the second-generation Phaeton, the model proved the carmaker could produce premium vehicles, ultimately paving the way for the Touareg and Arteon.

In China, it continued with the launch of a new Phaeton-sized car in 2016, known as the Phideon – sharing its underpinnings, like the original car, with the Audi A8 of the time. This car has never been sold outside of China.