As previously reported, Volkswagen Auto Group will be trimming down their models and variants following the current crisis affecting Germany's biggest auto maker. The first car to be dropped will be the flagship Phaeton.

First introduced in 2002, the Phaeton served as the basis for the Bentley Continental GT and the Flying Spur, which debuted the year after. While commonly referred to as a rebadged Audi A8, the two similarly sized sedans ride on a different platform although the two share some chassis components. The Phaeton is currently being built in Volkswagen's Transparent Plant in Dresden, Germany along with its platform stablemates, the aforementioned Continental GT (until 2006) and the Bentley Flying Spur.

Also built in the plant are a limited number of Touaregs and CCs.

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To cut down costs, the 1-billion euro plant will be shut down by mid-2016 to cut down costs as part of the company's restructuring. While the Bentley Flying Spur will resume its production in the Crewe plant in England, the Phaeton will be axed, along with the Dresden plant. The Phaeton was also unable to meet sales targets during its 13 years in production, prompting the shutdown of the said factory. Before the official announcement to close the factory was made, output per day was a mere eight cars.

While the doors to the factory will be closed, its structure will still remain a part of Volkswagen. "Production in Dresden will be suspended during the restructuring phase," said Jens Rothe, head of the works council of VW's operations in Saxony. He also added that the plant will eventually be building a new Volkswagen Group product when it reopens, ensuring "employment in the future will be secured on today's level".

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However, the temporary closing of the Dresden plant will not be the end of the Phaeton nameplate. While there will be no Phaetons for mid-2016 to 2019, a second generation model (which was confirmed by VW top executives) will be unveiled in 2020 as an all-electric luxury sedan, leading Volkswagen's shift towards hybrid and electric vehicles. On the other hand, the 500 workers of the Transparent Plant will be relocated to various Volkswagen plants throughout Germany.