The new Passat's raked windscreen and smooth underpinnings helped give the sedan a 0.27 coefficient of drag.

[4] The B5 Passat included higher-quality interior trim and the availability of luxury options to differentiate it in the marketplace.

A 4.0 L W8 engine producing 275 PS (202 kW) was introduced with a luxury version that included standard 4motion all-wheel drive.

In 2003, a 2.0 L Turbocharged Direct Injection (TDI) diesel engine producing 136 PS (100 kW) was added (making the Passat the only mid-sized diesel-powered car sold in the U.S.).

An updated version called the Passat Lingyu was released in late November 2005, which has the 1.8-litre turbocharged EA113, the 2.0 L EA113, and the 2.8 L BBG V6 petrol engines.

Models sold in Europe and the Republic of Ireland were similar apart from the trim level naming schemes; the trim levels were Volkswagen's "lifestyle" naming scheme: Comfortline, Trendline, and Highline.

Models sold in the U.S. had the 1.8 L 20-valve turbo four-cylinder engine, 2.0 TDI, the 2.8 V6, or 4.0 W8; trim levels were GL (2003 onward), GLS, GLX, and W8 (2002–2004).