VW Phaeton Falls Victim To Dieselgate Cost Cuts; Production To Be Suspended In 2016

VW’s diesel-emissions scandal has indirectly claimed another victim, as the resulting cost cuts have led the company to suspend production of the unprofitable Phaeton.

As Reuters reports, Europe’s largest automaker will end assembly of the flagship sedan at the Dresden facility, where it’s currently put together by 300 of the plant’s 500 workers, in late March next year.

“Production in Dresden will be suspended during the restructuring phase“, said the head of council of Volkswagen’s operations in Saxony, Jens Rothe, who ensured that “employment will in future be secured on today’s level.”

Cutbacks were expected in Dresden as the Volkswagen Phaeton production has dropped to approximately 8 cars per day, due to weak demand.

The shutdown is part of the automaker’s broader plans to cut around 600 temporary jobs in 2016 at another plant Zwickau, Saxon, and the affected Dresden personnel will have to commute 120km (76miles) west, to Zwickau, where VW builds the Golf hatchback and Passat sedan.

Labor representatives from Porsche are discussing with the sports carmaker on the possibility of employing some of the temporary workers from Zwickau, at two Porsche German sites.

The Phaeton is a project of Ferdinand Piech, the former Volkswagen chairman, which cost more than €1 billion ($1.1 billion) to develop, but it never managed to achieve its sales targets. On top of that, the entry-level Phaeton currently costs €89,650 ($97,200) in Germany, while the cheapest Audi A8 can be had from €81,000 ($87,800).