DRESDEN, Germany — While a showcase factory here crafts the first luxury sedans to wear the Volkswagen badge, the dealer body in North America continues preparations to begin selling the all-new VW Phaeton.

“The brand has been preparing for Phaeton so we have a stronger infrastructure in place today, as it launches,” says Frank Maguire, a former dealer and now vice president-sales and marketing for Volkswagen of America Inc.

“The Phaeton and Touareg (SUV) helped us improve focus on how we take care of customers in North America,” Maguire says here at the first media test drives of the long-wheelbase Phaeton luxury sedan. The vehicle goes on sale in North America later this year, priced at about $76,000.

Since 1998, VW and its U.S. dealers have invested $2 billion to create stand-alone facilities, themed after European market squares, where all activities radiate from the center.

There were only 81 exclusive dealerships in 1998 when the project began. There are 250 to date, growing to more than 300 by year-end, says Maguire. That figure will represent 60% of volume and more than half the total number of facilities.

The goal is to grow to 400 by the end of 2004, at which point 80% of the volume should be conducted by stand-alone facilities.

The investments have added four additional service bays, on average, increasing service hours by 2.1 million hours.

VW has revamped its parts-distribution system over the last three years and built new centers to ensure overnight parts delivery anywhere in North America.

The order process has been streamlined so that dealers now do the ordering, as opposed to VW ordering and allocating what dealers will sell.

Money also has gone into improved port operations to better distribute vehicles in North America.