Volkswagen is about to take a $40,000 step into the unknown, according to the Detroit Free Press
. The German automaker has begun U.S. sales of its Passat W8 luxury sedan, which boasts a 270-horsepower, eight-cylinder engine, all-wheel drive and a $37,900 base price -- a package that would have been unimaginable for the producer of so-called people's cars a decade ago.
VW's new $80,000 12-cylinder, 420-horsepower Phaeton sedan will move the brand further upmarket when it debuts in the United States in mid-2003.
Volkswagen is confident of success as it moves into the territory occupied by BMW and Mercedes-Benz, but some industry analysts are questioning the strategy.