Audi USA's bitter-sweet November

MercBasher submitted on 12/01/2006 Official AutoSpies Timestamp: 12:56 PM
from: www.theautochannel.com

[48] user comments | category: Misc News

Tags: Audi, sales, November

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Audi

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November

Audi USA's bitter-sweet November

Sharp declines in sales of the A3, A4 cabriolet, A6 and the TT were more than offset by increases in the A4 and the addition of Q7 volumes. The A4 and Q7 featured heavily subsidized lease programs in November which probably contributed to the success of these two vehicles. In total Audi sales were the highest recorded in a November - but surely Audi executives will be concerned about the declines in core products such as the A6. Read Article

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monkeyrun - 12/1/2006 1:35:49 PM

+3 Boost

wouldn't Audi's core product be the A4?

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EL34 - 12/1/2006 1:56:14 PM

+1 Boost

It is here where I live in Irvine, California.

The Q7 will take off and do really well.

monkeyrun - 12/1/2006 1:58:48 PM

-1 Boost

It'll really take off when either the Diesel or hybrid Q7 arrives.

IamEvilHomer - 12/1/2006 4:24:40 PM

+3 Boost

mercbasher - the A4 and Q7 are good leases but they are not throwing any more money at these cars then BMW is on there 5 series and MB is doing on the GL, R, or E class

they are up 5.4% on the year with no money on the A6, low inventories on the A3, and no money on the A8.

Not bad so far

IamEvilHomer - 12/1/2006 4:29:32 PM

+1 Boost

and the A3 is a small production in the US
i don't think less then 200 car drop in the us matters

monkeyrun - 12/1/2006 6:48:55 PM

+2 Boost

A3 is just an experiment for Audi in US.

People are not ready for a luxury hatchback yet.

ThaR8Don - 12/1/2006 8:08:56 PM

+2 Boost

The A3's only issue is no real lease offerings. We sell them very well so the comment the US is not ready couldn't be more wrong. It's just tough to tell someone hey here's the A4 @ about $360 and heres your new A3 @ $500 the US especially California is a heavy lease market. Other than that we do very well with the A3 and Our store had a record month IamEvilHomer has his facts together.

audiot - 12/2/2006 12:57:10 AM

-2 Boost

Yeah, I'm sure the 441 A3's sold last month were at your lot.

chewy - 12/1/2006 1:56:00 PMView My AgentSpace

0 Boost

I am sure Audi subsidizes leases less than BMW or other companies do. The Q7 has taken A6 sales, but togather the two are selling more than before. The TT is about to be replaced and is not sold in California and other states.

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SixxFive - 12/1/2006 2:12:00 PM

0 Boost

Audi also had to drastically slash Q7 allocation to the US because sales were so far off from expectation. However, european Q7 sales have been stronger.

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Agent009 - 12/1/2006 2:31:27 PMView My AgentSpace

+2 Boost

Actually Q7 sales are barely down down from projections so far. (got read those press releases and piece it together) The problem was Europe was way up beyond expectations. So rather than push it here with a hot lease and build sales on a limited capacity. They sent them where the hottest demand was at this time.

IamEvilHomer - 12/1/2006 4:27:38 PM

+2 Boost

agent009 that is right on

Why bring the extra cars here when they make 20% more on the exchange alone

MercBasher - 12/1/2006 8:39:21 PM

0 Boost

You guys need a reality check, the only reason the Q7 is moving at all is because of the heavily subsidized leases in the US. Look at the Friday Auto section of any major newspaper and you'll see Audi A4 and Q7 being dumped on the US market. VAG would make more money it it sold them all into Europe.

Occarnut - 12/2/2006 7:35:27 AM

+2 Boost

Actually to get a clear picture of Q7 sales you have to look at the mix...some variants of the Q7 are selling very well, like the Q7 4.2 Premium while other variants struggle...so overall the sales vs supply looks out of line but who knew..it is a new model..once that mix is fixed sales figures will look better.

1970toyotamarc - 12/1/2006 3:38:00 PM

+1 Boost

The A4 is doing extremely well. These numbers are great. Ever since it debuted in what 97 or 98, this model has been the catalyst for the turnaround of Audi. Once A4 owners start trading up to A6s and A8s, BMW better watch out.

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AUDIMAN4 - 12/1/2006 3:44:36 PM

+1 Boost

Toyota, Lexus...same thing.

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S4cabriofoxone - 12/1/2006 5:57:50 PMView My AgentSpace

+1 Boost

He was just countering on JakeKann's idiotic comment.

Occarnut - 12/2/2006 7:46:32 AM

+3 Boost

You should go sit in either an Audi or a VW before you post.

IamEvilHomer - 12/1/2006 4:26:13 PM

+1 Boost

Merc the proper post for this article is to post the article and then comment after. If you post the comments people think they are reading the article when they read what you say.

But if you are doing a hit piece on Audi I guess you don't care

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MercBasher - 12/1/2006 8:42:35 PM

-2 Boost

Hell no I don't care - I am feed up with guys taking the marketing pitches straight from the manufacturers - I'm adding my own analysis and I challenge you to counter my conclusions using the data provided by Audi.

AUDIMAN4 - 12/1/2006 6:25:59 PM

+2 Boost

Sorry, but I just don't see this a big deal. The A6 has never really been popular, and the TT is an aging design.

The new A5, TT, and R8 will drive up dealership visitation and increase sales.

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MercBasher - 12/1/2006 8:45:11 PM

-1 Boost

Bullshit the A6 used to be the best selling model for Audi in the US.

chewy - 12/2/2006 8:09:21 PMView My AgentSpace

+2 Boost

When, the A4 always outsold the A6. So I am not sure when the A6 was the top seller.

iown1 - 12/1/2006 6:57:51 PM

+3 Boost

You guys need to keep in mind the A6 is the best selling car, worldwide, in it's class. I have no doubt the Q7 cannibalized some of the A6's sales, however I believe that more importantly it's bringing more people into Audi dealerships. It really doesn't matter how you slice it. Sales were up 16%. How they did it or from which models really ddoesn't matter. Eventually it will round out and things will become more regular. I think the new TT will dramaticly lift Audi's monthly numbers.

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MercBasher - 12/1/2006 8:49:18 PM

0 Boost

I agree the A6 is the worldwide best seller in its class - it just shows how hopeless Audi marketing, pricing and dealers must be in the US in order to screw up so badly.

indoctrin8ed - 12/1/2006 8:34:25 PM

+1 Boost

No Audis are bargains. When’s the last time you thought "what a great deal that Audi is?". It's more like "Nice Audi. I wonder how much it is".

They're priced "correctly" at best, or much too high and that is their problem. Only fanatics or brand loyalists will pay too much for a car, and this won't keep a mainstream product afloat. The A3 problem is obvious, (36k with options), which suffers from this in USA where pricey small cars aren't in demand unless they're hot rod roadsters. Bad move for Audi to bring it to the USA.

The A6 is the same problem (value), for different reasons. Very nice car, but for around 65,000 with options in Quattro, it's just not worth it. The other mistake is the A4 is so nice, it doesn't make sense to spend 20,000 more on an A6, (or 10,000 more than an S4 if you want performance). Poor positioning. Lastly: Stiff competition, very crowded market: BMW 5 series which out-specs and outperforms it, E500, very crowded US market with M300/Cadillac CTS/STS, very crowded JPN lineup Acura TL/RL, Lexus GS/Avalon, even Infinity M/G, etc etc. Bottom line for the A6: You have to do it well and very very competitively/inexpensively, OR, do it better than everyone and charge premium for it. Audi did neither and shot themselves in the foot by making the A4 so good and so much less expensive.

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MercBasher - 12/1/2006 8:40:46 PM

+1 Boost

I disagree with you on whether an Audi is a bargain or not - the subsidized leases make the A4 and Q7 bargains. However I do agree with you on the A6. Lexus has the same problem with the GS350/430 - it just doesn't get market traction in the US.

chewy - 12/1/2006 8:54:08 PMView My AgentSpace

+1 Boost

BMW, MB, Lexus, all luxury and probably all manufacturers subsidize leases. Audi does it the least in fact. So your argument is weak here.

S4cabriofoxone - 12/2/2006 9:34:17 PMView My AgentSpace

+2 Boost

I do kind of like your post as a whole, but...

1. My A3 was about $35,000. This included a $4,000 factory bodykit (it's an accessory that happened to be on the one I saw, it's not S-Line). A $31,000 A3 2.0T DSG gave me the Open Sky system, heated front seats, CD player/AM/FM, leather, power driver's seat, xenons, and a few other goodies. Overall, it's very easy to live with, and nicely equipped. You don't need the fancy audio system or upgraded wheels for your A3 to look good. They brought it to the US basically as a test, to see if it would sell well- and it's exceeding their forecasts.

2. It's pretty hard to get an A6 3.2 quattro over $60,000. Most A6s are in the low-to-mid-$50K area. However, you can get a well-equipped A6 4.2 S-Line for about $65,000- but then again, all the competition is at least as pricey. The 550i, for instance, can end up well over $70,000.

3. The A4 is very nice, but the A6 is much nicer. Have you ever sat in one? The only car that I can think of that has a much nicer interior, for under $100K, is... the A8.

4. It depends on what you're looking for. Some people would rather have an A6 or E-Class than a 5 Series. 5 Series's interior is pretty ugly for this price. E and A6 are for people looking for more comfort; same with the GS. The A6 and GS are both better values than the E, but the E is an exemplary performer.

MercBasher - 12/1/2006 11:02:56 PM

0 Boost

chewy where's the data to support your view that in November 2006 Audi was subsidizing less than all other luxury marques?

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chewy - 12/2/2006 12:08:57 AMView My AgentSpace

+3 Boost

Where is your data that it has been subsiding more? Generally Audi did not have many specail leases. It currently has special leases on the Q7 3.6 and A4 2.0T, but only until December 4th. Not for an entire month like those Lexus sale events, or MB month to remeber promotions.

Occarnut - 12/2/2006 7:48:44 AM

+3 Boost

Look at any MBZ or BMW lease ad...there is your data. MBZ and BMW are buying them down.

AlexTx - 12/2/2006 2:54:29 PM

+2 Boost

Keep in mind that production of the A6 has been cut down for the U.S market; the TT is pretty much what is left over of 2006 models as the new one will be a 2008.
A8s are still very hard to get and the A4 Cab has its production cut down to for this time of the year.

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Rupert - 12/2/2006 3:48:38 PMView My AgentSpace

+2 Boost

audi doesn't like the US market much because:
1. americans don't think of them as prestige as bmw and merc.
2. the very weak dollar means audi is having a very tough time making money. ie with the Q7, US production was cut in order for more to be sent to other areas where it is a huge success.

Rupert - 12/2/2006 3:49:38 PMView My AgentSpace

+3 Boost

i should add that i live in prime X5/Q7/GL territory and i have seen loads of Q7s, but no Gls.

huu76 - 12/2/2006 8:48:23 PM

-1 Boost

I noticed the LS430/460 outsold the A8 10-1, 5-1 if you do an even split between new and old.

Since when does prestige have to be subsidized with lower rates? Shouldn't the Q7 sell itself?

I've also noticed VW has been cutting finance/lease rates as well.

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S4cabriofoxone - 12/2/2006 9:39:33 PMView My AgentSpace

+1 Boost

Hmm...

The LS430 was pretty much a class below the A8. It wasn't nearly as powerful (278hp), the interior paled in comparison, it was terribly bland to look at, and the pricetag was about $25K less than an A8L. It should sell better.

The new LS460 I'd hope would sell better. It's a completely new model, and therefore has more buzz around it than the A8. Then why am I getting an A8 for her? I still love the looks (as she does), the interior is still best-in-class, it has AWD, it has all the features she's had on the RX (plus, obviously, a lot more), it has a trick air suspension, and, I'll enjoy driving it myself. Very nimble for a large sedan, and the fact that it has 350hp doesn't hurt.

LS460 would be nice, but I think it's only "okay" in the looks department, neither the interior nor the powertrain excite me, and we can't get it with AWD.

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S4cabriofoxone - 12/2/2006 9:41:01 PMView My AgentSpace

+2 Boost

Oh and, she really does not want another Lexus, at least in the foreseeable future. She's simply sick of them, and wants something more upscale.

I can see her with an S-Class 4Matic after the A8. Until the LS is available with AWD, I'm not considering it.

sewingmachine - 12/2/2006 9:42:41 PM

-1 Boost

s6 looks too bland.

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indoctrin8ed - 12/3/2006 4:51:24 AM

+3 Boost

When you get above $50k for a car, it usually needs to "inspire emotion" to make people buy. Lexus's LS does not do this well to enthusiasts. Instead this car is the the "least offensive" "device" that completely insulates drivers from... well... Driving. That is worh money to people and therein lies the Lexus LS drivers market. Different story for other Lexus models.

S4: Do you *need* the AWD where you live? Where I live, it's only a few days out of the year where you wish AWD is necessary.

I worked a deal when I bought my M3. I made it a stipulation that for 3 days per year for three years, I get use of their demo X3 or X5 when and if it snows. I'm a long term customer, so they agreed. That's all I need.

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huu76 - 12/3/2006 12:10:39 PM

-2 Boost

Whatever enthusiasts. Obviously enthusiasts are not able to keep BMW/MB/Audi in business if they have to resort to selling watered down versions of their "prestige" mobiles to image whores. You guys have been programmed to get a boner once anything Germany drives by.

The LS is a limousine, as are the rest of the Euro-barges. You're supposed to be insulated when you're in the back seat. If driving was priority one, you'd get an M35, S4 or IS.

Foxy,
THe Q7 is new, so it should sell well (so why the alleged incentives?). I believe the LS is coming with AWD soon (LS460L I think).

The ES outsold the A4 as well, and they're both the same age, and Lexus still does not have to use incentives (the A4 is cheaper too).

S4cabriofoxone - 12/3/2006 9:57:30 PMView My AgentSpace

+2 Boost

Yes, I do need AWD, in fact. There was a snow day for my son on Friday- and I got stuck in the driveway, with the A3! I got out after about fifteen minutes. If it were AWD, it would've gotten out!

S4cabriofoxone - 12/3/2006 9:58:51 PMView My AgentSpace

+2 Boost

The Q7 is selling well, at least in my suburban area. And it would- if the XC90 and MDX can sell well, the Q7 sure can.

The A4 and ES are the same age? What are you smoking? The ES350 came out in 2007! The A4 came out in 2001 as a 2002 model! All the current version is, is a reskin!

AmazingBimmer - 12/3/2006 9:15:47 AM

-3 Boost

as usual.. its hard to keep growing when your products canabalize each other... now you know how good BMW is and how much of a superior of a brand it is... it does that even at a higher price point and makes a shitload more money doing it.. with better styling, and waaay better technology. Audi is moving the needle.. but will get stomped by MB and BMW.

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chewy - 12/3/2006 10:30:22 PMView My AgentSpace

+1 Boost

So, to sum it up, Audi had its best November yet. The Q7 has taken away some A6 sales, but the two combined are selling more than the A6 ever did by itself. Best November in company history is very good thing. 5.4% growth on the year is very good. This will probably be Audi's bes year ever. Audi also jus recenly lauched a new markeing campaign. So good fuure for Audi ahead.

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