Volkswagen plans a BMW 5-series rival.

Byline: Wim Oude Weernink

Volkswagen is planning a BMW 5-series fighter positioned above the next-generation Passat and below the Phaeton flagship.

Internally referred to as the C1, the medium-luxury VW model would also compete with the Mercedes-Benz E class and Audi A6.

"We have seen definitive design proposals," a VW source said. "You will get an impression of it when you see the next-generation Passat, which is due in 2004."

A decision to go ahead with the C1 project has been made, according to a VW engineer.

"Three months ago, it was not ...