Volkswagen has denied press reports that it plans to sell its luxury brands, Lamborghini and Bugatti, and cease production of the Volkswagen Phaeton luxury car in Dresden, in order to cut costs, according to dpa-AFX news.
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The company reportedly said that such speculation was complete madness and that there was absolutely no basis for the reports.
The Leipziger Volkszeitung quoted sources close to the group’s supervisory board which complained that Bugatti cars are ‘horsepower monster’, and that Lamborghini cars are ‘prestige sportsters’, that were acquired to add sparkle to Volkswagen’s image, and have detracted from Volkswagen’s focus on providing cars for the people.
The report added that the cost of producing the Phaeton far outweighed any benefits and that it would be better to cease production sooner rather than later.
The Phaeton is produced at the so-called ‘transparent factory’ in Dresden, a short distance from Leipzig, where the newspaper is based.
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By GlobalDataDpa-AFX notes that Volkswagen invested thousands millions of euros to buy its luxury brands, which in addition to Bugatti and Lamborghini, also include Bentley. It also invested millions to develop and produce the Phaeton, which has failed to reach expectations and has been taken off the market in the US.
Another local newspaper said that Volkswagen plans to facelift the Phaeton next year to give it a new lease of life until its replacement is introduced in 2009. The new model should be lighter than the previous model and positioned below the Audi A8. It will be styled as more of a coupe than a limousine and make full use of Volkswagen’s ‘Baustein’ or module strategy.
“We will not leave the segment,” a Volkswagen spokesperson told dpa-AFX news.
Volkswagen management is meeting with unions today to discuss further details of its restructuring programme and plans to reduce the workforce by 20,000 people. The IG-Metall union is demanding that Volkswagen ‘put its cards on the table’ and produce some details of its plans.
The ‘Leipziger Volkszeitung’ said that to keep production in Germany Volkswagen must reduce employment costs by 15-20% in the medium-term.
