VW using new models to woo BMW and Mercedes buyers

Volkswagen Group’s troubled mass-market VW brand is pushing upmarket with the Arteon, a new flagship model, as the marque seeks to lift margins and revive its image after its emissions-cheating scandal. The Arteon’s launch comes a year after VW stopping making the flopped Phaeton luxury sedan.

VW brand is traditionally known for its range of practical sedans, hatchbacks and SUVs. On Wednesday executives unveiled the Arteon fastback to woo customers who like upscale cars such as BMW’s 4-series Gran Coupe or Mercedes-Benz’s CLS coupe but at lower prices.

The four-door Arteon will go on sale in German showrooms next month starting at 34,800 euros (USD39,111, which we estimate to be about RM290,000 when sold in Malaysia).

VW needs higher-margin models to help fund a strategic shift to electric and self-driving cars as it grapples with billions of euros in costs for its emissions scandal.

The Arteon, featuring adaptive cruise control and enhanced emergency braking and steering functions, resembles VW Group luxury brand Audi’s A5 Sportback with its long wheelbase, extended hood and lowered roofline.

It’s not the first time the VW brand has pushed upmarket. In 2002, it launched the Phaeton sedan which was axed last March after never meeting VW’s original sales target of 20,000 cars per year. VW aims to sell up to 40,000 Arteons a year worldwide, about the same as the predecessor CC saloon which ceased production last October.

The is the latest example of a product overhaul at the VW brand to revive profitability which has been lagging rivals such as PSA Group and Toyota. VW will present redesigned versions of the Polo subcompact, one of its all-time bestsellers, in June and the flagship Touareg SUV in September, after it launched an overhauled Tiguan compact SUV last year.

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