If at first you don't succeed, try again, they say.

Volkswagen, which had a flop with its Phaeton sedan when it entered the luxury market, has scaled things down a bit, sported other things up a bit, and come up with a winner for those interested in the "near luxury" market: the 2009 Volkswagen CC.

The big Phaeton was an impeccably finished, imposing automobile. But nobody wanted that hefty price tag and a Volkswagen badge on the hood to boot. So the car was quickly withdrawn from the U.S. market.

Clearly, the problem was that the car was too large to seem to have any relation to a VW, the price tag was too high, and it just didn't have much cachet. Though Volkswagen officials don't think of the CC as a second entry into a segment of the luxury market in theory, I suspect that is how it will play out with consumers. The CC is way too classy looking a car to be considered a mere family car, and it bears some resemblance to certain Audi models on first glance.

What's more, the CC costs thousands upon thousands less than the Phaeton did, and it's smaller and sportier -- perfect for the entry level luxury market.

The CC's styling cues include a semifastback roofline, well-finished interior and tasteful touches of chrome here and there. It's known as the Passat CC in other parts of the world, but I think VW is wise to market this as a separate, unique entity with its own flavor, identity and market.

In fact, regardless of equipment or platform considerations, the CC looks like it has absolutely nothing at all in common with the Passat. In the CC, Volkswagen has a lovely top of the line halo car for VW that will generate quite a bit of traffic.

The CC comes in four versions: an S model that starts at $26,790, a Luxury model starting at $31,990, a VR6 Sport model starting at $38,300 and a VR6 4Motion all-wheel-drive version that starts at $39,300. Two engines are featured a 200-horsepower, 2.09-liter turbocharged four and a 3.6-liter, 280-horsepower six-cylinder model.

Standard equipment is quite lavish: a premium audio system, a six-speed automatic with Tiptronic (and a six-speed manual offered only on the base S model), side curtain air bags, 12 way power adjustable driver and passengers seats, heatable front seats, outside temperature display, split folding rear seats with an arm rest; all power accessories, chrome exterior trim, anti-lock brakes with electronic stability control; anti-slip regulation and an electronic differential lock; and plenty of other items.

The Luxury version's highlights include a dual zone climate control system, panorama sunroof, park distance control system, Sirius Satellite Radio, brushed aluminum interior trim and other goodies, while the VR6 highlights include the alloy wheels, bi-xenon headlights with adaptive front lighting system and a power rear sunshade.

As you might expect, handling is superb on this car. The steering feels absolutely perfectly balanced, with both ease of motion and sporting characteristics, without being too soft. Cornering was taut and flat, with the only issue being a bit more road noise than you might expect from the tires.

The interior features some of Volkswagen's usual high quality hallmarks such as a two tone design motif, deeply supportive seats and simple gauges with easy to understand controls. Even the steering wheel looked a bit dressier than usual with nice chrome accents.

However, as lovely as the interior is, it can seat only four persons, and that may be a bit of a problem for those who require a lot of passenger capacity.

In other words, the CC is headed squarely at those who are looking mainly for a driver's car with room for two more aboard in the back only at limited times.

Also, even though the interior was clearly well done, I think the dash still could have used a glitzier look to go with the arresting exterior of the CC.

The power from the base engine and larger power plant are quite impressive, but the manual transmission version is clearly the way to go if you want to get the most out of the car's potential.

The six-speed automatic is nice, too, but with the four-cylinder engine, it isn't quite as impressive as the more powerful V-6 when it comes to delivering ample reserves of acceleration when needed. Otherwise, the CC is quite the road-going sports sedan in most circumstances.

I do, however, hope that VW eventually offers the DSG dual clutch paddle shift transmission with paddle shifters as soon as possible -- it's one of the best in the industry and offers nice, snappy, precision manual shifting without the bother of the clutch pedal.