I fear the phrase “Volkswagen Phaeton” is soon to join “fire service” among the great oxymorons of the early 21st century. For a company whose name commands that it builds cars for the masses this luxury limousine appears to make no sense at all.

It owes its existence to Ferdinand Piëch, the man who until he retired last year was responsible for a vast expansion not only of the VW Group portfolio but also the market sectors in which those marques compete. Thus we have the pint-sized Audi A2, a Skoda that’s longer than a BMW 5-series and now, most bizarre of all, a limousine wearing the same badge as a Lupo city car.

But if a Golf-sized Audi seems no more than sensible, and an executive-sized Skoda is brave but defensible, a limousine-sized VW borders on foolhardy. I struggle to see why people would spend between £42,000 and £70,000 of their own or their company’s money on a Volkswagen, especially when it looks like an enlarged Passat. I suspect that even if it proved to be the best luxury car in the world, the badge alone would deny it the success its abilities would otherwise deserve.

Prejudice, however, can’t alter the fact that it is capable of holding its own in a class dominated by Mercedes, Audi and BMW. It may not do much for the Phaeton’s image, but don’t assume that the car behind the badge is any the worse for it.

Already available throughout Europe, the Phaeton goes on sale in Britain next spring. There will be five models with half of all cars sold using a 240bhp 3.2 litre V6. There will be a 335bhp V8, a 180bhp 2.6 litre V6 diesel, a 313bhp V10 diesel and, ultimately, a titanic 420bhp 6 litre W12. Although it will account for just 5% of UK sales, attention is inevitably drawn to the W12 because it is this car that has made the £70,000 Volkswagen a reality.

Set aside all issues of snobbery and you’d be hard pressed to say the W12 is not worth it. What I like most about the Phaeton is its total dedication to what were once traditional luxury car values and its resistance to being sidetracked into other spurious and unseemly pursuits. I like the new A8 more than most cars in this class but when Audi proudly told me it was the most sporting car in its category my instinct was to ask: “Why?” Likewise Mercedes has just launched an S-class that will out-accelerate a Porsche 911 while failing to improve by any discernible degree the ride or refinement of its predecessor. As for BMW, its new 7-series is actually harmed by its overtly sporting aspirations, as anyone who has experienced its low-speed ride will know.

The Phaeton is not bothered by any of this. It hasn’t a sporting bone in its body, it couldn’t care less if rivals can accelerate faster or corner quicker. Even with the W12 under the bonnet and the potential to reach 60mph from rest in 6.1sec and over 180mph (were it not electronically restricted to 155mph), the W12’s real strengths are its uncanny smoothness, mellifluent tone and fabulous torque.

Admirably the Phaeton’s attention squares entirely on old-school luxury in all its forms. Its build is so massive and its progress so hushed that you feel you could drive through a minefield without affecting your comfort. The interior is probably the most attractive in the class and its controls can be easily identified and operated without the unnecessary complication of having to scroll through various computer menus, as BMW compels you to do.

Some aspects of the car are less successful. The automatic gearbox has just five gears and while its change is slick enough it is slow to respond when you want to squirt past a column of dawdling traffic and instantly require the full W12 effect.

The fuel consumption is simply horrendous, too. I know such things are not meant to matter at this price but I did 400 miles at a gentle gait on country roads and motorways and was rewarded with just over 16mpg. The massive motor is partly to blame, but so is the fact that the car weighs 5,366lb — over half a ton more than its lithe and light aluminium cousin, the Audi A8. For the same reason, try to push it hard through corners and the Phaeton soon dissuades you. It is too big, heavy and cumbersome for such pursuits and isn’t shy about letting you know.

I feel inclined to forgive it this last point. Indeed I find the Phaeton’s lack of sporting pretensions rather refreshing. What’s left is a limousine in the finest traditions in every respect save its badge.

Despite a disappointing update the Mercedes S-class is still a better car, while its style, image and all-round ability leave the new A8 a nose ahead, too. But I’d place the Phaeton way above the BMW 7-series, Lexus LS430 and Range Rover. It’s a charming, effective and admirably complete car and one that, were there a little more justice and a little less snobbery in this world, would establish VW as a credible luxury marque. As it is, I expect its charms will be discovered by relatively few. Those that do are in for a treat.

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