VW Needs Cash, Temporarily Closes Phaeton Plant in Dresden

8 years, 11 months ago - 21 December 2015, Autoblog

Volkswagen will end production of the current Phaeton in March 2016 and will temporarily close the lavish factory in Dresden, Germany, which builds the money-losing sedan. However, VW will retool the plant and still plans to assemble the next-generation Phaeton EV there in about 2019, according to Reuters.

VW Group boss Matthias Müller reportedly pushed to close the Dresden plant but needed the approval of the supervisory board. The factory is an architectural wonder where workers assemble vehicles on a moving wood floor, but the site builds just eight of the sedans per day, according to Reuters. With 4,000 deliveries last year, it's clear that most buyers just don't care about the Phaeton.

The decision to temporarily close Dresden comes as part of VW's greater cost-cutting strategy. The company already intends to reduce its research and development budget by $1.1 billion for 2016, and some factory upgrades also might face delays. Müller is ready to axe any non-vital projects to make sure the automaker has enough cash to weather its emissions scandal.

The German automaker has doggedly refused to give up on the Phaeton over the years, despite the model's lack of success. Multiple rumors touted a new generation on the way, and VW reportedly even canceled a nearly finished replacement due to cost concerns. In October, the company renewed its promise to revive the sedan but this time with a fully electric powertrain and advanced driver assistance tech.