Volkswagen is currently undergoing a transformation that should be closely watched by students of product marketing as well as anyone fascinated with the automobile. The question is whether a company can change its basic market position and jump from the low-price segment up to the luxury market. Conventional thinking says that this is a very difficult task—that once you’ve defined your product and its value, it is very difficult to make a radical move in another direction. 

Volkswagen carved out a hugely success market with its inexpensive, economical compact cars. Who among us hasn’t been the proud driver of a Beetle, Micro Bus, Rabbit, Golf or Jetta as a college student or a first car with the advent of a full-time professional job. My wife still gets misty when she talks about the purchase of a sexy new VW Karmann-Ghia coupe when she finished nursing school, left home and went off to work in Boston.

The vision of moving Volkswagen upscale is that of its former chairman, Ferdinand Piech, and is still a work in progress. The 2003 model year saw the advent of the Touareg SUV and the Passat W8. The $40,000 Passat W8 challenges the sports sedan market currently ruled by BMW, Jaguar and Mercedes. Yes, we’ve come a long way from the humble Beetle, but the jury is still out on the subject of how the public will ultimately buy the concept. Volkswagen obviously faces an uphill battle. No matter how good its upscale cars are, it will take some time, flawless product execution and a lot of promotion to achieve the point where the neighbors ooh and ah when you pull up in your new VW Passat. 

The Passat W8 targets the BMW 5-Series and the Mercedes E-Class, which are well ensconced in the mind of the luxury car buyer. To this point, the Passat has earned a solid reputation as a competitor to the highly rated Honda Accord, Toyota Camry and Nissan Maxima and covers a wide spectrum of models extending from about $22,000 for the basic sedan up to the 40 grand mark.
Our test sedan had a number of features usually associated with the luxury market, including a sunscreen that can be extended from the windowsill to filter out excessive light coming through the rear window. Other touches include real wood trim, automatic rain-sensing windshield wipers, heated front seats and outside mirrors as well as a height-adjustable, telescoping steering wheel. 

The car’s design is solid, but not particularly striking. The grille is steeply raked and integrated into the front bumper with the VW logo predominantly displayed in the middle. Halogen headlights and turn-signal lamps are housed in a clear polycarbonate covers that seamless meld into the front fenders.

Safety is enhanced with the installation of side-curtain technology—an airbag that deploys an inflatable curtain that covers the windows during a side-impact to protect the heads of front and rear passengers. Seat-mounted side airbags also are standard equipment.

Even the humblest VW product features good ride and handling and the W8 is no exception. The Passat rides on a very stiff chassis to maximize vehicle dynamics. The feedback offered by the steering and suspension is excellent. The ride quality is also good, but on the firm side, as one would expect. Volkswagen claims that handling is enhanced by its permanent all-wheel-drive technology, which is standard on the Passat W8. Of course, drivers who face a lot of wet and snowy roads will appreciate the improved traction. 

The W8 engine is inspired mechanical innovation. In the classic V-8 design, the engine is comprised of two banks of four cylinders set in a row. VW engineers basically fused two narrow angle V-four engines together at the crankshaft. The cylinders in the each arm of the V are offset by only 15 degrees. Put the two Vs together and you have a more compact engine. If you look at the W8’s aluminum engine block from the side, rather than four cylinders lined in a row, you see four cylinders in staggered configuration, one up, one down, etc. This architecture saves space and allows Volkswagen to stuff an eight-cylinder engine into the physical space normally occupied by a four or a V-6. 

The innovative design seems to work well in the real world. Volkswagen claims that the Passat W8 will scamper from zero to 60 miles per hour in 5.9 seconds. The engine develops ample power and is also quiet and smooth. 
 

Vehicle: Passat W8
Price as tested: $39,975
Engine:
Type: 4.0-liter W8
Horsepower: 270 @ 6,000 rpm
Torque: 273-ft. lbs. @ 2,750 rpm
Fuel economy, manual transmission 
City - 17 mpg
Highway - 24 mpg
Curb Weight: lbs. 3,847