Volkswagen's upmarket strategy lives on. VW calls this car a “design concept,” but we know that the C Coupe GTE concept, unveiled at the Shanghai auto show, is a thinly disguised upscale "four-door coupe" that will come to market next year. At 199.7 inches long, 76.0 inches wide, and 56.9 inches tall, it will be the largest Volkswagen this side of the Phaeton. And it will be available only in China.

To be built by Volkswagen's joint-venture partner SAIC, the C Coupe is based on the VW Group's modular-longitudinal MLB architecture; its closest relative is the long-wheelbase, Chinese-market Audi A6L (the plug-in version of which was just unveiled). It will be the big brother of another low-slung, aggressively styled VW, the China-only Lamando. And it is also bigger than VW's Geneva concept, which was based on the modular-transversal MQB platform and foreshadows the next-generation CC.

While the new model will eventually be available with more conventional powertrains, the C Coupe GTE concept sports a plug-in-hybrid powertrain. Teaming a 210-hp four-cylinder turbo and a 124-hp electric motor that is integrated in the eight-speed automatic gearbox, the C Coupe GTE boasts combined output of up to 245 horsepower and 369 lb-ft of torque. In the best of circumstances, it can go up to 31 miles on electricity only, and it can reach 80 mph with the electric motor. With combined power, it is reasonably quick but certainly no racer: The sprint from zero to 62 mph takes 8.6 seconds, VW says, while top speed is rated at 144 mph.

One of the most interesting aspects of the concept is its exterior ambient lighting. When the vehicle is unlocked, a thin stripe that runs alongside the car lights up. Inside, the C Coupe is designed to function as a chauffeur-driven car, with special emphasis on rear-seat comfort. The dashboard is distinguished by horizontal and angular lines, which create a thoroughly modern and futuristic look.

The C Coupe likely won't be offered outside of China. It would be too big for Europe, and in the U.S., it would step deeply into Audi territory. But it gives important hints of the new design language that will shape VW's upmarket models. The aggressive and low grille and the headlights will define the next generation of the Phaeton, which we expect to be offered to Americans.

With the C Coupe, Volkswagen proves it is going after every conceivable niche in the market. It won't make life easier for Audi, but traditionally, internal competition is the last thing the VW Group is concerned about. With a vehicle to close the massive gap between the Passat (China gets the same version as we do) and the Phaeton, the VW portfolio will be more rounded—and diversified—than ever.

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