Volkswagen lost about €2bn on the Phaeton, its chairman's personal project

The Phaeton was conceived by Ferdinand Piëch, then chairman of the Volkswagen Group, as a flagship to push the VW brand upmarket and outdo Mercedes-Benz and BMW. He handed his engineers a list of extreme parameters, including the requirement that the car be drivable 'all day at 300 km/h with an outside temperature of 50°C, while keeping the interior at 22°C' — even though its top speed was electronically limited to 250 km/h.

The obsession was personal and, in his own words, admitted: Piëch later said that 'if I ever forced one of my hobbies into one of my car projects, it was the Phaeton's draft-free A/C system.' The car was hand-assembled in a purpose-built glass factory in Dresden with capacity for 20,000 cars a year. But sales fell far short of expectations — only about 25,000 were built in the first four years, and 84,253 over the entire fifteen-year run.

Bernstein Research estimated that Volkswagen lost €28,101 on every Phaeton sold from 2002 to 2012 — a cumulative loss of almost €2 billion. The engineering was admired; the badge could not carry the price. A VW on a six-figure car could not command the prestige of a Mercedes or Bentley, so the spending could not be recovered, and a dedicated low-volume factory turned a slow seller into a per-car loss. Production ended in March 2016.