Within the next couple of years, Volkswagen seems poised to reintroduce its Phaeton luxury flagship sedan to the U.S. market, and thanks to the 2015 Kia K900 and 2014 Hyundai Equus, consumers seem to have finally warmed up to the idea of high-lux sedans from mainstream brands. That said, though, VW still has its work cut out for it to ensure the second-gen Phaeton doesn’t repeat the sales flop of the 2004-06 model (which is still on sale in Europe and China), with a high-tech platform and drivetrain.

According to Automotive News, when the new Volkswagen Phaeton arrives in late 2016 or early 2017, it will do so with the option of an advanced plug-in hybrid powertrain that will likely be shared with other Volkswagen Group models riding on the MLB platform, which include the 2016 Audi Q7. There are no additional details about the Phaeton PHEV, but the upcoming Q7 has been developed with two PHEV powertrains: one that uses a 2.0-liter gasoline four-cylinder and another with a 3.0-liter diesel V-6.

One of the more interesting details about the report is the fact that VW seems to be positioning the new Phaeton to compete against the ultra-luxurious 2014 Mercedes-Benz S-Class leaving the closely related 2015 Audi A8 to take on the newly introduced 2016 BMW 7 Series.

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