Will Overspending to Turn VW into a Luxury Brand Kill Audi?

Things are starting to get messy at camp Volkswagen concerning Project C1, the vehicle that Volkswagen intends on slotting between the next-generation Passat and the über-luxurious Phaeton. The secretive car, which has yet to see the light of day in concept form or via spy photos, has been set back from its original debut of mid-2006 to mid-2007, said to be due to internal troubles between other VAG brands and outside partners.

From what is known, Project C1 is set to be the vehicle to allow Volkswagen the privilege of mingling with established midsize executive sedans such as the Audi A6, BMW 5-Series, Jaguar S-Type, Mercedes-Benz E-Class and to some extent, the Volvo S80. Keep in mind that this is the only segment that VW has not yet entered (not counting the unsuccessful Passat W8).

Insiders

Not counting the unsuccessful Passat W8, the Project C1 will be Volkswagens first entry into the midsize executive sedan segment. (Photo: Volkswagen of America)

It makes sense that Pischetsrieder would be pushing for an unconventional design, as in his own words, "The Phaeton fails to sell because it is not distinctive enough" (see news archive for Jul 7, 2004: Volkswagen CEO Pischetsrieder Says Phaeton Styling was a Mistake). Talking about the next-generation Phaeton,

The C1 has been described by VAG boss Bernd Pischetsrieder as a "Renault Vel Satis that works". (Photo: Renault)

Heres where things start to get messy: Volkswagen wants to build the C1 on a rear-wheel drive platform, something completely different than the brand has ever attempted. Initial word that the C1 would ride on the new A6 chassis has being scrapped now that Maserati has become a joint-venture partner for the C1. This news isnt being taken to very lightly by the folks at Ingolstadt, however, as it was originally Audi that would give the secrets behind its ASF aluminum space frame, Quattro all-wheel drive and six-speed automatic gearbox in return for Maseratis

Talking about the next-generation Phaeton, the VW CEO stated, "It will definitely not be a normal saloon". (Photo: Shawn Pisio, American Auto Press)

Pischetsrieder is pushing for the link between the C1 and the Italian firm to get hold of the Quattroportes sophisticated chassis and advanced rear-mounted transaxle technology. In a recent issue of British magazine CAR, the VW chair said, "The transaxle principle [ensures] a 47 to 53 percent front-to-rear weight distribution, which is crucial for what I consider to be best-in-class driving dynamics, by quite a long distance." This report spells out the use of a shortened version of the Quattroportes chassis for the C1.

If this follows through, Volkswagen will hold the technology behind the performance-oriented chassis instead of Audi, which as it seems will benefit from very little. To add insult to injury, the C1 could easily

The C1 could easily be a better performing vehicle than Audis own A6. (Photo: Rob Rothwell, American Auto Press)

But the problems dont end here. Volkswagen has a notorious track record for incurring extremely high cost overruns, and the C1 is experiencing its own financial difficulties. For instance, the German automaker wants to fit its sublime twin-clutch DSG gearbox to the C1, but to make this a possibility a substantial amount of engineering work must be done to both the chassis and the transmission in order to install it at the rear end of the vehicle. Volkswagen is also developing an air suspension system, which it believes is crucial in combining a supple ride with top-tier handling.

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