Poor Volkswagen. Apparently they're too dense to realize that ¾ of a century spent firmly establishing themselves as providers of cheap, shitty transport for the masses is not something easily overcome. A luxury VW is a car virtually nobody wants.
Remember the Phaeton? Neither does anyone else. The Phaeton was a premium Beetle built in a plant capable of building 20,000+ cars a year. It took them four years to reach that number in worldwide sales. US sales were cancelled after two model years when less than 2,500 were sold during that entire time. Canada managed to move less than 125 total in the same time frame.
I guess folks want prestige with their luxury, like emblems with a three-pointed star or a Spirit of Ecstasy hood ornament. "I'm sorry... you paid how much for that Microbus badge?" is a question owners of the nearly-identical (but aluminum) A8 will never have to answer.