Western European sales of the once-struggling Volkswagen Phaeton were up 25 percent in the first half compared with 2004.
VW credits the arrival of the new, 3.0-liter V-6 diesel version of the upper-premium model and rejects the premise that incentives are driving the surge.
VW sold 2,153 units of its flagship in the first half, according to market research JATO Dynamics. But production of the Phaeton has increased just 6 percent to 2,943 units at VW's plant in Dresden, Germany.
A VW source said that demand is high for the entry-level V-6 TDI, which was launched last December and starts at E60,480 in Germany. But the source added that the top-of-the-line Phaetons with the V-10 diesel and W-12 gasoline engine are still slow sellers. Prices of those models range from E89,680 to E111,980.
Officially, VW denies the Phaeton's sales are pushed by incentives, but dealers in the major European markets are offering generous deals on the model:
Another way VW is trying to increase Phaeton sales with so-called "soft" incentives.
"We are encouraged to offer interesting leasing rates to personalities or companies that would contribute to the model's image," a dealer in Belgium said.
VW has loaned the Phaeton for half a year to people such as actress Joan Collins as a way to help boost sales.
-- Ian Morton contributed