Volkswagen is abandoning its bid to make the Phaeton a rival for the 7-series and S-class in Europe — and it will tailor the next generation of the car to the US and China instead.

The Phaeton, which has sold in tiny numbers since its launch in 2002, has just been facelifted and given some of the internet connectivity originally seen on the latest Audi A8, another of its rivals.

But VW is already planning to switch the next Phaeton to a new platform, and insiders admit that its styling and mechanical make-up will be steered towards the US market, where sales of the car ended in 2009, and China, where VW expects to sell 3000 of the current model this year.

“There’s no doubt that the Phaeton absolutely has to go back to the US,” said our insider. “This is being reflected in the next version. It will look much more like a car for America.” That’s likely to mean a slight increase in size and far more ostentatious styling than the current, ultra-conservative look.

VW is considering a number of options for the car’s underpinnings. The most likely source is said to be the extended version of the Audi A6 that’s sold in China. But our insider refused to rule out the possibility of using the A8’s aluminium platform. “Everything is open to us,” he said.

The focus on markets outside of Europe is likely to ensure that all three of the current Phaeton’s petrol motors — V6, V8 and W12 — survive into the next incarnation. There will also be a hybrid version, which is likely to use a version of the petrol-based powertrain from the Touareg hybrid.

Diesel options are likely to be a 3.0-litre V6 and possibly a V8, which could give the car a performance oil-burner to replace the discontinued 5.0-litre V10 TDI.

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