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Volkswagen chairman Bernd Pischetsrieder has given the green light to a radical new estate-cum-MPV to plug the gap between the Passat and Phaeton when it lands in 2007. Codenamed Sfero, the new model is designed as a cheaper alternative to the BMW 5-series, Jaguar S-type and Merc E-Class.

Autocar’s artist’s impressions reveal a bold new design direction for previously cautious VW. Insiders privy to early design proposals say its exterior adds a twist to cars like the Renault Vel Satis and Vauxhall Signum, with saloon-car styling at the front and a large hatchback at the rear.A high-ranking VW official at the recent Golf launch described the Sfero as possessing ‘more than a dash of the Mercedes GST about it’. Significantly, the Turkish-born designer behind the look of the Mercedes GST crossover concept, Murat Gunak, now heads VW’s design team.

Why not a conventional exec saloon? Pischetsrieder insists that the Sfero must not cross paths with next year’s new Audi A6. Secondly, sales of saloons are slipping, while estates are gaining ground. Third, the size gap between the next Passat and Phaeton is not big enough to accept another saloon.Inside, a high-quality cabin mixes the spaciousness of a big estate with the practicality of an MPV. VW’s trump card, however, could be price. It’s still early days, but supplier sources suggest a starting price of £25,000 for a 3.2-litre six-cylinder Sfero – well below rivals.

Secrecy surrounds the mechanical details. Volkswagen had been planning to use the same C1 platform as next year’s new Audi A6, offering front- and four-wheel drive with a longitudinal engine layout.

However, sources in Germany suggest the technical tie-up announced at the Frankfurt Motor Show between VW and Maserati means the Sfero could sit on a modified rear-drive platform from the new Quattroporte. The Maser’s transaxle layout would offer advantages in weight distribution and snob appeal.

Engines under consideration include VW’s 3.2-litre V6 petrol and 5.0-litre V10 pumpe düse turbodiesel, as well as Audi’s new 3.0-litre common-rail diesel and 4.2-litre V8 petrol. It remains to be seen whether VW will equip its new exec with four-cylinder power to match its rivals at the lower end of the executive car ranks.

Pischetsrieder knows all about executive cars, having worked at BMW for 25 years before joining VW in 2000. Since assuming the top job last year, the 54-year-old German has regularly said he intends further to diversify the Volkswagen range.

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