The Volkswagen Auto Group is still looking to become the world’s largest automaker by 2018, and while the company had its best global sales year of all-time in 2014, it’s still struggling to expand its flagship brand upmarket. For years, Volkswagen AG has been weary of building any Volkswagen models that directly compete with its Audi stablemates for risk of taking sales away from itself. Luckily, it looks like Volkswagen has finally made peace with the idea of a little inter-squad competition, as the company has just launched the brand notably up market with the Volkswagen Coupe Concept GTE at the Geneva Motor Show.

More than any other automaker, the case for a premium line of Volkswagens has been a difficult one to build. After decades of living in the shadow of its iconic (and cheap) air-cooled Beetle, the brand successfully emerged in the 1980s as a maker of smartly designed and practical performance cars like the Golf GTI and Scirocco. In the 1990s, it established itself as a builder of capable mid-market sedans with strong Jetta and Passat models. But since then, most moves upmarket have been met with fierce resistance. The ultra-luxury Phaeton was sold in the U.S. between 2004 and 2006, despite sharing a drivetrain with the Audi A8 and being hand built in the same factory as the Bentley Continental Flying Spur, the car was considered a major failure, and was discontinued after just two model years.

But the idea of a premium Volkswagen began to change in 2008 with the introduction of the CC sedan. With Audi-like luxury and looks reminiscent of the Mercedes-Benz CLS-Class, the car’s success as an upmarket alternative to the Passat sedan has led the company to believe that the time is finally right for another leap. The Concept Coupe GTC picks up right where the CC leaves off in the model lineup. In the press release for the GTC, Volkswagen explains that “the Volkswagen CC is positioned in the upper B segment; and the Phaeton [still in production in Europe], as a premium sedan, is in the D segment. The Sport Coupé Concept is breaking out of its current segment and into the C segment.” If the GTE were to see production, the car would not only slot between the Passat and Phaeton (in Europe), it would also be positioned between the Audi A4 and A6. The car is 191.7 inches long – almost exactly as long as the 2016 Audi A6, and its premium tech-laden interior looks like it could have come straight out of Audi’s Prologue Avant concept.

The exterior was designed under Walter de Silva, Volkswagen AG’s design chief, and the car’s five-door hatchback configuration and crisp lines and fastback profile are reminiscent of another Audi – the A7. Under the GTE’s premium accoutrements, the car is built on Volkswagen’s ultra-versatile MQB modular platform. Underpinning everything from the Volkswagen Golf to the Passat to the Audi TT, the platform will carry a host of front-engine, front-wheel drive Volkswagen AG cars going into the future. Like the Audi Prologue Avant, the GTE is debuting in near production-ready form. The sleek sedan is powered by a hybrid powertrain that teams a 3.0 liter V6 with two electric motors to deliver power to all four wheels, and making a combined 374 horsepower. The car can go from zero to 60 in around five seconds, and has a top speed of 155 miles per hour. Volkswagen claims the GTE also has an all-electric range of 32 miles, with a combined range of 745 miles on a single tank of gas.

While its road-ready status has led people to speculate on how close the GTE is to becoming a reality, Volkswagen remains mum on whether or not the car will ever hit showrooms. For now, Volkswagen says the GTE is “heralding a new and progressive Volkswagen design language,” so even if the GTE doesn’t see production, we’ll likely see key design elements showing up on the next-generation Jetta, Passat, and CC models. Either way, the Sport Coupe Concept GTE shows that Volkswagen has finally made peace with moving upmarket, and isn’t afraid to step on Audi’s toes anymore. This could mark the beginning of an exciting new chapter for the brand, and besides, what’s wrong with a little sibling rivalry?

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