BOSTON – Sporting timeless design, a relatively low price, a Germanic fun-to-drive nature coupled with a smooth ride quality, and a luxurious interior, the 1998 Passat saved Volkswagen’s bacon just as the company was considering a retreat from the American market. Continual improvements over the next eight years helped to ensure its appeal, with a roomy station wagon model, better control layout and design, more glitz on the outside, a 4Motion all-wheel-drive system, and even an ill-fated eight-cylinder luxury model debuting after the initial launch. This Passat is the car that set the tone for VW’s success in the late 1990s and early 2000s, gave Volkswagen’s “Driver’s Wanted” advertising tagline credibility, and previewed a product renaissance that led to record-breaking sales in America.

Unfortunately, in the eight years since that revolutionary Passat first went on sale, Volkswagen has been chasing delusions of grandeur, vainly trying to execute plans for head-to-head competition against Mercedes-Benz. Any grade-schooler examining the sales results of this effort could conclude that the futile repositioning of Volkswagen as a luxury brand has not panned out as planned, since “luxury” to American customers is more about the badge on the front than the engineering underneath or feature count inside. A big, chrome “VW” on the grille reminds most people of Beetles, old or New, and does little to inspire envy in insecure neighbors or colleagues.

Mercifully for VW, change is in the air. Don’t tell the marketing gurus responsible for cultivating an upscale image for the Phaeton sedan and Touareg SUV, but Ken Davis, the product manager for the redesigned 2006 Volkswagen Passat, stated what critics and customers already knew when he announced to journalists: “We are not a luxury make.” Instead, said Dave Wicks, director of sales for Volkswagen of America, VW strives to provide “affordable German engineering, distinctive European styling, (and a) fun-to-drive (character).”

Whew. Finally, Volkswagen gets it. Let Audi be the Volkswagen Group’s mainstream luxury channel, free to chase BMW and Mercedes-Benz, while VW concentrates on being what it always has been: The people’s car. After a day spent driving the new 2006 Volkswagen Passat, we’d guess plenty of people will find this to be the perfect sedan or wagon. And the best thing is, if you want affordable German engineering, you can have it for less than the cost of the average car sold today. Or, if a luxury car is more your taste, you can have that too by adding every available option to a new Passat. Indeed, the 2006 Volkswagen Passat legitimately serves either customer, and in combination with a slew of new cars scheduled to arrive in VW showrooms during the course of the next year, the new Passat is certain to help lead the company’s next product renaissance.