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

If it arrives at something close to this price, well designed and fully equipped with a V8 engine connecting through to a

Instead of building luxury cars that people arguably don't want, Volkswagen should concentrate more on quality and reliability. (Photo: Shawn Pisio, Canadian Auto Press)

rear-wheel drive layout, the C1 may stir up some interest among premium buyers. Will BMW and Mercedes fans immediately accept a VW on par with their luxury brand? Not too likely. But if Volkswagen can hold out long enough, it just might turn its people's car into a luxury nameplate and in so doing, parasitically pull most of Audi's customers away from a brand the automaker has built up for decades, crushing any hope of Audi overtaking the premium big boys. It might also manage to continue VW's downward spiral in third party quality and dependability tests.

In the end, instead of quibbling over the C1 and next-generation Phaeton, Volkswagen may want to think long and hard about taking a page out of Toyota and Honda's handbook and concentrate more on quality and reliability than building more luxury cars that people arguably don't want. The money spent on the Phaeton should have made the Audi A8 the best car in the world, the Touareg should have initially worn a four-ringed Audi badge on its grille, and the C1 should never happen.

Volkswagen should instead make the Mk V Golf, the New Beetle, Jetta and Passat more reliable, so that new VW customers sold on the brand's top-tier perceived quality buy a second car instead VW instead of getting turned off by a bad ownership experience.