The Phaeton was a huge mistake, you shouldn't compare it to the Audi A8. Look at the weigh of the Phaeton compared to the A8 and if people don't even see a difference between a Passat and Phaeton (happened to many people I know), it is a bad thing for VW. I didn't say the Phaeton is a bad product, it isn't. It is just the wrong product for VW, it has the wrong design and it weights too much.
Smart? A success? Do you mean the Smart company which is rumored to be closed down for good?

The Touareg a success? Well, maybe. Due to Diesel engines.
But imagine how many Touareg VW would have sold under the Audi brand name. I personally know a doctor and a business man who bought a Touareg V8 instead of a Cayenne S because of price tag and how their customers would look upon them.
So your guess with the "rival" for the Cayenne is just right, with an Audi badge on the Touareg, the Cayenne would have lost lots of cusotmers.

I didn't say the new Golf looks bad or is bad. It is just too expensive. WAYYYYYY too expensive. A friend who drives a Boxster S now, owned a VW GTi Pirelli Edition with 110 HP many years ago when it showed up on the market. I think it was a Golf II, I don't remember anymore. The price tag was around 18000 DEM as far as I remember. Now look at the current Golf GTi, you can spec it easily for 40000 Euro and more. Volkswagen lost the connection to their roots, they started to improve quality but at the same time, they wanted to attack BMW and Mercedes and not their old competitors Opel and Ford. This worked well for a few years but now people don't have that much money anymore, so they prefer buying something else.
Volkswagen is aware of that but I'm not sure they can change things very fast.

Piech and all other members of the Porsche dynasty weren't allowed to stay at Porsche? Would you please explain?