Volkswagen has updated its Phaeton flagship for the second time in its short life, reaffirming the lackluster opinion of the car in the full-size luxury sedan market. With a brand new BMW 7-series and facelifted Mercedes-Benz S-Class already on sale, plus the completely redesigned Audi A8 and Jaguar XJ just around the corner, Volkswagen’s entrant in this segment is facing a serious uphill battle.

The new 2011 Volkswagen Phaeton comes onto the market with a fundamentally new front design and is making its world debut in what will arguably be its biggest market, China. It will be on display for the first time at next week’s 2010 Beijing Auto Show.

The complete powertrain lineup includes six-, eight- and twelve-cylinder engines ranging in capacity from 240 horsepower to 450 horsepower. The most fuel efficient model packs a 3.0-liter V-6 turbodiesel and returns a fuel economy (European combined cycle) of 27.7 mpg yet can accelerate the car from 0-62 mph in 8.2 seconds and see it reach a top speed of 147 mph.

Coming as standard across the range is a 4Motion all-wheel drive system, air suspension, bi-xenon headlights, 18 inch alloy wheels, 4-zone air-conditioning, 18-way adjustable seats and leather and Alcantara trim.

Volkswagen is yet to confirm if the updated car will be sold in the U.S. but rumors of such have been brewing, off and on, for almost two years. The return now looks more likely than ever, with the brand’s American CEO Stefan Jacoby previously stating it's time for a comeback for the big sedan, and this update could be just what they needs to get the ball rolling.

Now, if only Volkswagen can get the pricing right. With the 2011 Hyundai Equus coming onto the market this summer with a mid-$50,000 sticker, Volkswagen can’t be aiming too high with its latest Phaeton unless the company is looking for another sales flop. When Volkswagen's flagship Phaeton was last sold in the U.S., it was almost universally overlooked, selling just 3,354 total cars in its brief 2003-2006 stint in the American market.

[Volkswagen]