Bloomberg reports the car is being reworked to lower production and material costs for the hand-built Mercedes-Benz S-Class rival.
The original, launched back in 2002, has been in decline for years. Last year, Volkswagen sold just 4,000 units: Mercedes-Benz sold 100,000 S-Class.
A pet project of Ferdinand Piech, the Phaeton famously offered 186mph motoring in 50deg C heat while maintaining a stable 22deg C cabin temperature.
The new one is likely to push further engineering boundaries – but now Piech has departed Volkswagen, it seems some of his ultra-high targets for the new Phaeton may now be under review.
“There is always the element of the Phaeton being the answer to a question no one ever asked,” said Tim Urquhart, market researcher at IHS Automotive, told Bloomberg.
“It is surprising VW is sticking with model, he said. Given Volkswagen’s renewed focus on saving costs, “it is even more lucky to survive.”