I'm not 100% sure about the 2004 Passat wagon, and if it varies by engine/transmission setup, but my 2003 1.8T manual sedan has the tow hook behind the bottom grille on the passenger side, right next to the fog light. I have not found the tow hook on my 1999 passat though. The safest way is probably to remove the grille before towing, but I use a flat rope with plain hooks and it fits in between the grille. Please note that Volkswagen really doesn't like it if you tow your car with automatic transmission, as it can, and most likely will, seize up after towing for a while. Towing a manual car works better, but you still should take care. The only reason I use the tow hook is to be able to recover the car from a ditch (snow and ice) without having to pay for a tow truck.
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