Industry Report: Turmoil in Wolfsburg as Volkswagen's C1 Midsize Luxury Car Delayed

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

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

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 suggest that C1 will take the form of a tall hatchback incorporating a long wheelbase and distinctive styling, in order

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

to combine a sporty stance with ample interior room. It's been described by VAG boss Bernd Pischetsrieder as a "Renault Vel Satis that works".

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 VW CEO stated, "It will definitely not be a normal saloon." VW, of course, isn't about to make the same mistake with its midsize luxury entry.