The latest report from Germany states Volkswagen will offer a plug-in hybrid option for the second generation Phaeton full-size sedan.

The latest report from Germany states Volkswagen will offer a plug-in hybrid option for the second generation Phaeton full-size sedan.

Sources close to Volkswagen cited by Automobilwoche say the much debated all-new Phaeton will receive a more frugal derivative set to use a plug-in hybrid arrangement, although the report doesn't specify whether it will be available right away. The same sources say the MLB-based flagship model from Volkswagen is set for a late 2016 / early 2017 launch and will have United States and China as the main markets.

Aside from receiving a hybrid system, we already know the overhauled Phaeton will be available with the recently introduced twin-turbo W12 6.0-liter engine delivering 608 PS (447 kW) and 900 Nm (663 lb-ft) of torque which will enable the model to return 22 mpg US (26.4 mpg UK or 11 liters / 100 km) in the combined cycle.

Interestingly, Volkswagen insiders mention the company's bosses want the new Phaeton to compete head to head with the Mercedes-Benz S-Class whereas the next-gen Audi A8 is going to be positioned as a BMW 7-Series competitor.

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