A 'people's car'? With its luxury Phaeton, Volkswagen aims up market.

It was after a round of golf at a swell private course. The caddies had cleaned off our clubs, we'd gotten out of our spikes and the parking attendants had pulled our cars around.

My sleek silver sedan was parked behind a sleek silver Mercedes S500. As golfers and assembled crew examined the two vehicles, it seemed that my car had everything the Mercedes had. Thanks to some rakish front Xenon lights, it might have had even better physical looks. The space in my back seat and trunk seemed more generous. And my car listed for a mere $72,000 compared with the $90,000 or more it would take to buy a new S500.

There was just one issue--my car had the Volkswagen logo on the back end and the name "Phaeton" nearby. The collective reaction seemed to be, "Huh?"

That about sums it up. Volkswagen has produced a vehicle that is very competitive against BMW's 7 Series, top Mercedes models and the A8 from Audi, VW's subsidiary. A 12-cylinder version of the Phaeton is now rolling into dealerships, which will position it in the very select circles of the world's finest sedans.

[ILLUSTRATION OMITTED]

Even the 335-horsepower V8, which I drove, boasts 200 mph on its speedometer, and there's little doubt that the car could easily hit that speed. The Phaeton positively oozes with confidence at high speeds and in inclement weather. The dashboard is a high-tech marvel with panels that automatically move when you start the car to reveal air vents and such. The computer controls are better and easier to use than BMW's iDrive system; it even allows the driver to check tire pressure by flicking a button. The doors close with an impressive solidity, making just the right "clunking" sound. VW has built a hell of a car.

The only issue is brand perception. Volkswagen, which means "the people's car," has long stood for economy and value. If most people had S70,000 to spend, they'd think about other premier marques first. In some senses, VW has built too good a car because it challenges buyers' perceptions. At a time when there's an absolute avalanche of new products hitting the market, it is exquisitely difficult to reposition a brand.

Some in the media are calling the Phaeton a "flop" because only 626 had sold in the United States as of this writing. I don't think that's fair. Some current VW owners will want to move up and some value-oriented luxury customers will find the Phaeton a bargain. Then again, maybe I just love noble lost causes.