Volkswagen will take on the likes of the Mercedes-Benz S-class, Lexus LS430, BMW 7-series and Jaguar XJ8 when it launches its five metre long, 1.9 metre wide 'Project D1' luxury saloon next year.

The car will debut at the Geneva motor show in March with two petrol engines - a 3.2-litre 241bhp V6 and a 420bhp six-litre W12. Five engines will eventually be available, including a 313bhp five-litre V10 turbodiesel developing 750Nm of torque which will be offered with a six-speed automatic gearbox.

The D1 has aluminium doors, boot lid and bonnet. The doors are claimed to be the most rigid ever installed in a production car and are made using a system of laser welded diecast aluminium.

Running gear includes pneumatic suspension with stepless, mapped electronically controlled dampers and optional four-wheel drive, which VW calls 4Motion.

VW's new flagship also features a completely new climate control system called 4-Corner Climatronic. This is claimed to supply draught-free indirect flows of air to interior zones by automatically opening and closing vents - it's interesting to note that no face-level dashboard vents are visible in the first 'official' interior photo released by the company.

Like BMW, with its 7-series, I-drive system, VW has tried to avoid cluttering the dashboard with too many controls. Instead it has grouped as many functions as possible around a central seven inch colour display screen.

Depending on how the car is specified, the system includes audio with six disc CD changer, navigation, TV, computer, telephone and climate control.

The D1's tail lights use light emitting diodes (LEDs) instead of conventional bulbs and a 'coming home function' lights up the area around the car using head and tail lights plus lights in the exterior rear view mirrors.

Standard safety equipment includes front airbags, side 'bags front and rear and side window curtain' bags.

VW will announce Project D1's production name towards the end of the year when it opens its new Transparent Factory at Dresden, in former East Germany.

The DM 365 million factory, where buyers will be able to watch their car being built, will employ around 800 people building up to 100 units a day.