Volkswagen AG is surging ahead in the horsepower race in its quest for a place in the premium-vehicle market alongside the likes of German rivals Mercedes-Benz AG and BMW AG. Now on the starting grid is an upgraded W-8 engine for a range-topping Passat and a massive W-16 for a new, future Bugatti. Both are derived from VW's compact VR (German acronym for “vee in-line”) design, where two staggered cylinder banks are separated by a narrow 15-degree “vee” angle — delivering a possible ...

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