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Volkswagen aspires to become a full-line manufacturer, with products ranging from the smallest subcompacts to the largest luxury cars, and the VW Phaeton is the latest example of the brand's upward mobility. In a bid to prove to customers that this luxury car is indeed different from all the others, the company has set up a factory, at a cost of some 186 million euros (roughly $208,000,000 at current exchange rates) that is unique in all the world. The building is located in the heart of Dresden, Germany, an 800-year-old city known for its arts and craftsmanship. The factory's walls are made almost entirely of glass — over 290,000 square feet of it. Its floors are covered entirely in Canadian maple. And its layout is visitor-friendly, set up to receive, per day, 250 tourists (by advance reservation at 5 euros each), customers, or prospects (gratis). There are no smokestacks, no loud noises, and no toxic byproducts. Parts arrive, and luxury cars depart. It looks to us like the most expensive way to build cars since Cadillac conceived of an assembly line for the Allanté that included a ride on a 747 between the start of construction in Italy and the finish in Detroit, but if the process convinces customers they're getting something special, maybe it's worth the added expense. We had an opportunity to tour the facility, and get answers to some frequently asked questions while we were there.

Does this look like the lobby of an opera house, or a factory? Actually, during the European floods of 2002, when Dresden's opera house was inundated, the "transparent factory" did play host to the opera Carmen, but ordinarily it is tourists, customers, and prospects who are welcomed in this space. The sphere on the right houses an interactive video experience for learning about VW. A customer commissioning center resides just off-camera to the left of the two balconies shown, inside which Phaeton buyers can choose colors, leathers, woods, etc., for their cars. The ground floor houses a restaurant, and on the lower level there is a simulator that provides visitors a virtual test drive of the Phaeton. VW intends to invite many of the first American Phaeton customers to Dresden for a factory visit.

The trams arrive on the lowest level (shown on the far left), where parts are unloaded and stocked in sequence for just-in-time delivery to the cars they are intended for.

The transparent factory handles final assembly only. All the smelly, noisy operations, such as stamping and welding and then painting the steel body, take place elsewhere (in Zwickau to be specific). Painted bodies arrive at the factory by truck. The other 1200 parts and 34 preassembled components are shipped to a remote logistics center some three miles away and are transferred from there to the factory via trams that run on Dresden's public transport tracks.

Phaetons start out on a conveyor that is about 20 feet wide and includes a box that is preloaded with all the parts required for this car during this assembly phase. (These boxes are restocked five times during the vehicle's assembly process.) The circles along the sides of the conveyor are air-conditioning vents, and each car rides on a platform that each worker can elevate to a level that is comfortable for him or her. Inductive chargers beneath the maple flooring, like those that recharged the old GM EV1, recharge the electric screwdrivers and torque wrenches. The conveyor moves at a very slow pace, and there is no official time limit to get each job done. If a worker feels he or she needs more time, the time is allotted, so that quality is ensured. That said, the current production rate is a fairly leisurely 40 cars per day over two shifts, whereas the theoretical maximum speed is 150 cars per day with three shifts, at which point there will certainly be a time limit on each job.

After one lap on the floor-mounted conveyor belt, the body is placed on one of 31 overhead carriers, each of which can rotate the body to a comfortable angle for the employee to fasten underbody components. Most work at the transparent factory is done by hand, but robots handle five operations. This one is pressing the adhesive-bonded composite-plastic spare-tire well into the steel chassis. The spare-tire well arrives in the plant with the pneumatic suspension's air compressor already installed.

The painted bodies arrive and are stored in a multifloor area visible along the back wall of this photo. When a body is called up on the production schedule, it comes out of storage and is loaded onto a conveyor shown in the foreground on the second floor of the transparent factory. Its doors are removed and built up on their own line, before being reunited with the original car downstairs on the ground floor.

The suspension and the drivetrain are assembled on the basement floor, nearest to where the parts are dropped off by tram. From there they arrive on the second floor by elevator. Here you see a 4.2-liter V-8 4MOTION drivetrain and chassis all assembled and waiting for another robot to marry them with a silver Phaeton body, shown in the background. The entire operation, including the torquing of all bolts to the body, is automated.

After one lap of both the upstairs conveyor and the suspension and drivetrain loop, the Phaeton moves down to the ground floor. The two robots we see here are installing the road wheels (farther away) and the windshield and the rear-window glass. Basically, the robots handle the work that is too heavy or uncomfortable for the 227 line workers to perform.

Two instrument panels have just arrived on a carrier, delivered by an autonomous robot, seen pulling out from the front of the IP carrier. Many of these little robots run around the factory, guided by some 6000 magnets imbedded in the flooring, delivering the boxes of parts and other components just in time.

At this stop, various hoses are connected to the front of the car, and coolant, brake fluid, and gasoline are added to the car. We couldn't see a single drop of spilled fluid, nor could we sniff a whiff of vapor.

Following all of this, a high-pressure water bath checks for leaks, several final system checks are performed, and visual checks of the paint finish and panel fits are conducted in light booths like this one. Each Phaeton currently spends about five days on the line here at the transparent factory.

Shortly after the wheels go on the car, it is lowered to the ground and started for the first time. It then gets its headlamps aimed and its suspension alignment checked. It is also run on a dynamometer — an underground track with numerous rough surfaces to reveal rattles — and some cars are even driven on the streets of Dresden.

Once all tests have been satisfactorily passed, the Phaeton is either wrapped for shipment by truck or placed in this glass tower for eventual factory delivery. It should be noted that all cars in this tower and on the assembly line are already sold. Factory delivery customers are treated to lunch and a tour. Then their cars are parked in the lobby area where an associate familiarizes the customer with all functional aspects of the car before he or she drives the Phaeton out of the glass factory.

These are questions we and other journalists asked of the VW Board of Management and the leadership of Volkswagen of America during the recent launch of the U.S.-spec Phaeton long-wheelbase V-8 and W-12 models.

Q: Why does VW feel the need to enter this rarefied market?
A: Over the past three years 15 percent of current VW owners have left the brand for a luxury brand. These VW customers tend to be nonconformists, less interested in the snob appeal of a given brand, and so might be uniquely attracted to a VW luxury car.

Q: VW's J.D. Power and Associates product-quality and dealership ratings have not been that great in recent years, so how does the company expect to compete in the luxury segment, where quality is so important?
A: The corporation has installed a new board member in charge of quality, instituted new quality measurement techniques, and decoupled the quality and dealer service functions. And finally, the Phaeton was launched in Europe almost a year in advance of North America so as to uncover any potential problems prior to entering the car's biggest potential market. Finally, the Phaeton warranty will be four years and 50,000 miles, bumper-to-bumper, with free maintenance for the first four years.
At the dealership level, there has been a $2 billion investment over the past several years to prepare for the move upscale to accommodate both the Touareg and the Phaeton. There are now 250 stand-alone VW dealerships (up from 81 in 1998), and by the end of 2004 this number will increase to 400. The number of service bays per dealership has increased, the vehicle ordering system has been streamlined to speed delivery of new cars. Similarly, the parts capacity has doubled so that overnight delivery of most parts is now the norm. Finally, those dealers that sell the Phaeton (not all will) will have appointed ambassadors so that each customer deals with one person only. Loaner cars will also obviously be provided for Phaeton owners.

Q: Why name a four-door closed car after a classic convertible body style?
A: The name was chosen and insisted upon by former CEO Ferdinand Piëch (despite the efforts of the marketing department to dissuade him). He regarded the phaeton coachwork as some of the highest quality and most luxurious of the classic period. Also, some of the finest examples of this type of coachwork built in Germany came from the former East Germany built by companies like Dresden's own Gläser, which provided bodywork for Horch—one of the former constituent companies of the current Audi.

Q: Won't the Phaeton just erode Audi sales?
A: The company feels that the Audi A8 and VW Phaeton have such completely different personalities that they will appeal to different customers altogether. The aluminum Audi weighs so much less and feels so much sportier that it is seen as a BMW competitor, while the VW should appeal to a more comfort-oriented Mercedes intender.

Q: Will VW follow the Lexus example of breaking into the luxury market with low pricing?
A: Yes and no. The Phaeton will offer good value—for example, a 12-cylinder engine for roughly the price of a V-8 from Mercedes or BMW—but incentive pricing won't be used to lure big sales volumes. Low, low volumes are expected at first, as the company builds to a possible annual volume of 4000 to 5000 units. Conventional profitability is also not expected in the short term. There is also no plan to provide price support on resale values, although marketing support may be applied to the preowned market to ensure cradle-to-grave value.

Q: Who exactly is the target customer?
A: Fiercely individual self-made people who aren't label-conscious. They're expected to be aged 50 to 55, 75-percent male, 85-percent married, 75-percent college graduates, with a $300,000 median household income.

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Source: https://www.caranddriver.com/features/a15134438/vws-transparent-factory/

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