If at first you don’t succeed, try again. This appears to be the motto that Volkswagen is taking with regards to its ultra-luxury sedan, the Phaeton.

The Phaeton was an excellent vehicle, the perfect demonstration of what an automaker with brilliant engineers can do if it chooses not to concern itself with budget constraints. Built with immaculate precision, the highest quality and newest technology, the Phaeton was a truly impressive vehicle. The only problem is that it was a sales flop. It failed to capture the North American market due to image-related problems. Consumers didn’t feel compelled to invest considerable amounts of money in an entry-level brand that also produces Golfs, Jettas and Beetles. But just because the Phaeton didn’t make it in North America doesn’t mean that it’s a dud elsewhere in the world. In other markets, including its home country of Germany, it recently received a mid-cycle update that focused on appearances and technology similar to the changes made to the Touareg 2. And that mild facelift makes it clear that Volkswagen is getting ready to bring the next generation Phaeton to market in a couple of years.

Insiders are reporting that the underpinnings of the new Phaeton could come from upscale sources, as if its relationship with Bentley’s Continental GT and Flying Spur isn’t enough. The first rumour sees Volkswagen teaming up with parent company Porsche, twinning the development of the Phaeton with the sports car brand’s up and coming Panamera four-door. This is a fairly believable approach considering the two worked together in developing the Touareg and Cayenne combo. The other potential version would link the Phaeton to the next-generation Audi A6 and A8. The vehicle that was spied, sported the tail end and doors of the current-generation Audi A8, which could indicate that the big VW would go on a weight-loss diet consisting of an aluminum space frame chassis.

When the Phaeton returns, it will most likely be offered in a four-door version as well as a new two-door version. The former won’t be the limo-like vehicle that was brought here between 2003 and 2005, but a sleek new four-door coupe, a vehicle that could lure buyers away from the Mercedes-Benz CLS, the upcoming BMW CS and other sporty sedans. Previously, it was thought that this vehicle would be based on an extended wheelbase version of the Passat, allowing for it to be built and sold at a relatively affordable price, but it looks like the plans to up VW’s image by chasing the world’s finest brands are back into play.

The real surprise, however, comes from the fact that Volkswagen looks to also be targeting the grand touring convertible market, and specifically the Mercedes-Benz SL-Class roadster. The grand touring market is a highly profitable arena with competitors from Jaguar, BMW, Maserati and others, and Volkswagen could easily obtain a slice with a sleek two-door folding hardtop convertible. Spy photographers have snapped a vehicle that fits this description to a tee, circulating around Norfolk, England - the home of engineering consultants and sports car makers, Lotus.

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