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

Although such details have not been set in stone, one thing has been made clear by Volkswagen pushing forward with its C1 Project,

VW isn't backing down on its plans to compete at the top end of the executive car market despite lackluster sales of its Phaeton. (Photo: Shawn Pisio, Canadian Auto Press)

that VW isn't backing down on its plans to compete at the top end of the executive car market despite lackluster sales of its Phaeton. The C1 Project makes another point very clear too. That Volkswagen will push forward even at the expense of Audi, a plan that makes little sense to most outsiders. After all, Volkswagen AG has labored for years to turn Audi into an accepted premium brand, in the minds of most consumers to be alongside the likes of BMW, Jaguar and Mercedes-Benz. So why the need to transform a brand that has long been the "poster child" of economy into a premium contender? Rather, VW could exploit the brand's rich history of entry-level vehicles such as the Beetle, Microbus, Rabbit, Golf and Jetta, into a high volume seller, or in other words keep doing what it has always done, but use the money it's wasting on glass factories and put it into building reliable cars. It makes more sense to pull Bentley farther down market than to try and teach a penguin fly, so to speak.

Just the same, market analysts say that the C1 would be the key to raising VW's image in both North America and China, markets where the VW brand name is slowly slipping. The segment's best seller, the Mercedes-Benz E-Class, delivered 190,066 units last year, but VW hopes that the C1 will take a big chunk from the three-pointed star's sales. In order to break

Instead of forcing the Phaeton on an unwilling public, VW should exploit the brand's rich history of entry-level vehicles such as the Beetle, Microbus, Rabbit, Golf and Jetta, and be the best in the various entry-level segments. (Photo: Volkswagen Canada)

even, it is predicted that the new model would need minimum worldwide sales of at least 50,000 units.

Even though it's a fair way down the road, insiders report that Volkswagen is already considering several spin-offs to the C1, including a station wagon and a tall MPV crossover vehicle similar to the Mercedes-Benz GST or R-Class.

Depending on which plan goes through, and how many existing components from Volkswagen, and/or components from Maserati and/or Audi end up in the C1, will directly affect its price point. Price estimates place the vehicle at under E35,000 ($55,000 CAD, $42,000 USD) in base form.