The most overhyped cars

By Dan Lienert

updated 3:20 p.m. ET April 26, 2004

The main question about Volkswagen's new Phaeton luxury sedan is: "What were they thinking?"

Anyone shopping for a vehicle would be impressed by the car's luxurious interior, sleek lines and crisp performance. The problem, as many critics (including Forbes.com) have pointed out, is that the Phaeton's base prices range from $65,000 for V-8 models to $95,000 for 12-cylinder cars. It is hard to imagine anyone who would be willing to drop so much money on this car when the superior Audi A8 L sedan — also made by VW — is on sale for the same amount across the showroom floor.

Despite the fact that Volkswagen says that it wanted to build the best car in the world, it can't give the Phaeton away. Only 453 of the cars were sold in the U.S. in the first quarter. That's 35 percent of the total number of A8s that Audi sold over the same period and, to compare the Phaeton to a segment leader, 15 percent of the total number of LS 430 sedans that Toyota Motor's Lexus sold in the first quarter.

Some may contend that the Phaeton will have done nothing wrong if it becomes a boutique nameplate trading in small volumes — except that that would run counter to everything that populist, high-volume Volkswagen stands for — not to mention its stated goals for the car. What is more worrisome, though, is that it makes VW seem out of touch with its market.

The Phaeton has become one of the most overhyped cars on the market because Volkswagen spent an enormous amount of time and money developing the car, promoted it heavily and has ended up looking like a company that's overreaching, and charging more for its cars than is appropriate to its reputation. In some cases, however, when a carmaker goes outside its traditional brand identity, as Porsche has done with its new Cayenne sport utility, the result can be a success. The expensive Cayenne has been a big hit, totaling more than 12,000 unit sales and offsetting the declining sales of Porsche's cars, the Boxster and the 911.

Ford Motor's Jaguar X-Type, which is also on our list, is an example of overreaching in the opposite direction: Jaguar has run into problems by building a vehicle that is too cheap and high-volume given the company's prestigious history.

Our slide show is a look at overhyped cars of yesterday and today — vehicles that turned out to be not exactly what the marketplace wanted, despite heavy promotion. Although some of these cars may have initially enjoyed strong sales, thanks to their being successfully hyped, ultimately they disappointed both manufacturers and customers. While the Phaeton may be a decent sedan, it and the other vehicles on this list met with a public that said, "We're not buying it"--literally and figuratively.

To compile the list, we looked at sales figures and the manner in which the cars were promoted versus what they actually turned out to be. The goal was to determine what the idea behind each car was, and why its sales were disappointing.

The Phaeton is a modern example of such an overhyped car, but take a look at the different ways in which manufacturers promised new types of vehicles that would change the industry — and ended up defending their bad decisions to shareholders and customers.

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