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VW delays new Phaeton flagship sedan

The Bugatti Veyron was a crusade begun by former Volkswagen Group CEO Ferdinand Piech. Even though the old patriarch is no longer with the company and the astonishing coupe is rumored to have never made a cash profit, everyone understands why the car remained in the family and why a successor is on the way. The same can't be said for the VW Phaeton, another one of Piech's pursuits. Thirteen years after the budget brand introduced the now 89,650-euro ($101,000) luxury sedan that competes with other in-house products, no one knows why it lives. Since VW made roughly 4,000 of them last year, the news that it's being delayed won't affect many people. The next-generation Phaeton developed on the MLB platform is apparently ready to go right now, but Bloomberg reports that the bosses have demanded lower production and material costs before it gets a final green light. At the moment the Phaeton is put together by hand by white-gloved technicians, which might sound like a great place to start counting pennies, but again, those technicians only built 4,000 sedans last year. That's fewer than the Eos, which is being retired for slow sales, and VW sold 3,411 Eos models in the US alone last year. Recent hire Herbert Diess is the VW exec in charge of the cost-cutting push. The Phaeton is a grain of sand - but a very important one - on the beach he's meant to conquer: Diess plans to raise VW brand profit to more than six percent by 2018 at the same time there's a group-wide push to save $5.5 billion. That number would more than double the brand's current 2.7-percent profit for 2015 so far, that current number being about half the profit over at struggling French maker PSA Peugeot-Citroen. The new Phaeton's on-sale date had been reported as 2017 or 2018 earlier this year. It isn't clear how long the sedan will be pushed back because of the production changes.

Jay Leno brings a rotary-powered VW Beetle to the garage

It takes something really unique or inventive to pique Jay Leno's interest. His show, Jay Leno's Garage, has featured everything from concours-worthy classics to completely custom, home-built machinery. How do you get Leno to feature one of more than 20 million Beetles on his program? Stick a turbocharged rotary engine under the hood. The Beetle's owner, Mario Markakis, swapped the car's stock flat four-cylinder for the Wankel engine from a 1990 Mazda RX-7 Series 5 Turbo. The engine's 250 horsepower are fed through a reinforced version of the Beetle's stock four-speed transmission. That's about five times the original engine's output. It works well, with the car putting down some impressive times at the drag strip. Markakis did most of the work to the Beetle in his garage. In addition to the engine swap, he's modified the car's brakes, suspension, and interior. Check out the video to hear all the details of this custom Wankel-powered Volkswagen. Related Video: Celebrities TV/Movies Mazda Volkswagen Classics Videos Jay Lenos Garage rotary mazda rx-7

VW diesel scandal: South Korea could be next

To no one's surprise, there are constant new developments in the VW diesel scandal. We hit the main points in a number of posts recently, but there were other, smaller developments that we didn't put into their own post. Instead, we've collected them here. For our complete coverage of this issue, click here. There's a lot to digest, so here goes. To try and keep dealers happy, VW announced that it guarantee bonus payments to its US dealers this month worth $300 for every new car sold ($600 for each Passat). The automaker is also going to guarantee payments from the company's customer experience bonus program. A memo from VW's US chief Michael Horn said, "We understand the pressure these recent events have put your business under and we are committed to providing you support," according to Automotive News. You can see Horn speaking at an event Monday night above. There will be at least one more official investigation into just how widespread this issue. South Korea has now said it will look into the emissions numbers for around 4,000-5,000 cars there. The affected TDI engines can be found in two VW and one Audi models (Jetta, Golf and A3) in South Korea. In the US, there could be another investigation as well, since Senator John Thune, (R-SD), the chairman of the Commerce, Science and Transportation Committee, has asked the Federal Trade Commission to take a closer look. A scandal this big is not only going to affect VW. To get ahead of any possible criticism, Bosch has issued a statement saying that yes, it does make parts for the 2-liter, 4-cylinder TDI engine that is at the heart of the problem. But, in a statement emailed to Reuters, said, "We produce the components after specification of Volkswagen. The responsibility for application and integration of the components lies with Volkswagen." Looking ahead, VW said in a new statement (available below) that its new EU 6 diesel engines do, " comply with legal requirements and environmental standards." That means that, supposedly, there's no "defeat device" needed to make these engines clean enough to pass strict environmental regulations. That'll be important if VW wants to keep marketing diesel as a clean fuel. For now, the tide seems to be turning against the automaker. Volkswagen AG has issued the following information: Volkswagen is working at full speed to clarify irregularities concerning a particular software used in diesel engines.