Parent auto maker Audi AG is keeping the supply of certain vehicles constrained, such as the A3 hatchback, so that profit margins won’t be eroded, de Nysschen says.
There is only a 60-day supply of A3s, he says, noting that while leasing is 52% of Audi’s overall business, no lease deals are offered on the hatchback.
“We cut off potentially half of the market for the A3 in order to earn full profit contribution on every unit,” de Nysschen says.
More than 80% of A3 buyers are new to the Audi brand and are switching from other European marques vs. domestic car brands, he says.
Audi also is limiting supply of its flagship A8 sedan to 60 days to maintain its residuals. “That model should not be freely available,” de Nysschen says, adding about 35% of Audi vehicles are custom ordered.
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