Autocar understands the rising costs of developing the advanced transmission have lead to it being put on ice.
Volkswagen first revealed the 10-speed DSG transmission at the Vienna Symposium in 2013. The event is traditionally a stomping ground for VW Group members to unveil their latest technology.
It was initially thought that the DSG transmission would be used by a wide variety of diesel engines in an effort to drive down CO2 emissions across VW’s fleet. EU targets specify that 95% of new cars must emit no more than 95g/km of CO2 by 2020.
The unit was planned as a successor to the six-speed DSG transmission which features in most of today’s Volkswagen Group range. It was expected to feature as part of the eighth-generation Passat line-up, which was unveiled last year.
The announcement leaves Volkswagen trailing behind Mercedes-Benz in the race to lower CO2 emissions by adopting advanced transmission technology. Mercedes introduced its own nine-speed automatic transmission in 2013, initially on the E-Class. The unit has since been offered on a variety of models including the S-Class and C-Class.