When first launched in the US VW expected to sell 5 000 Phaetons annually. But Phaeton sales didn't even came close to this target and in 2005 alone VW sold less than 1 000 units.
VW's admission of defeat is quite significant as the company needs the lucrative American market to sustain a car such as the Phaeton.
This means that it could only be a matter of time before European production of the luxury car is booted as well.
However, VW seems committed to be a player in the luxury car segment as rumours have it that the German carmaker is developing a four-door coupe to slot in above the Passat. Such a coupe will be aimed at the Mercedes CLS.