One of our great family friends is the Operations Manager at the Mission Viejo dealership in SoCal (I'm sure many of you have actually been to this dealership). I've been talking to him recently through email about general questions about the company and getting an internship. In his last email he make some really great points about Audi and the future of the company. My email ended with a question about the new RS6 which is where he picks up:


"RS6s are still questionable, as the last time RS6s were out (2003 only in the US), Audi shipped 2500 of them to the States and had a lot of trouble selling them -- there ended up being huge factory rebates just to get them in people's garages.

However, much has changed in the eyes of the automotive consumer -- Audi has gained so much esteem and recognition since then; an RS6 would likely sell strongly now.

What has been interesting to watch, from the retail end, is how the company has been molding its image. This is largely, as you may already know, because of Porsche's recent increase in stock holdings as allowed by a new law passed in Germany that previously prevented any one entity more than 25% ownership of Volkswagen -- in order to keep it the car of the people. Now, there are, I believe, five major players at the top of the Volkswagen / Audi tree -- and from what I hear, four of them emigrated directly from Porsche, having very strong ties to the factory. So, what does this mean in the long run for the consumer? Well, simply look at the history. Since 2003, a major shift occurred in the way Audi designed their vehicles. Whereas once built by the accounting department as a mid-level, economy/luxury car that the middle class could afford and enjoy, Audis are now built by the engineers with a hegemonic domination that has caused the cost of building, and thus the cost of ownership, rise like a yeasty loaf of bread. Proof of this is in the pudding -- the suggested retail prices have crept up and up and up on every model as they become more sophisticated, more agile, more stunning.

At the same time, the volume of Audis produced has increased steadily, but not at an inflationary rate that would otherwise diminish the value of the vehicles. At the same time, Audi has spent more and more in an effort to turn the spotlight on themselves -- note the entry of the R8, the Car of the Year as proclaimed by whom? Everyone. Top it off with an ad campaign (of which we have previously seen very little) touting the R8 halo in a prime-time Superbowl slot, and it's off to the races. Oh wait, we've been doing some of that too, haven't we? In fact, the Le Mans officials had cracked down so hard on Audi to try and get them to lose, it's almost as if the engineers had to have a brainstorming session on how to not win. Imagine someone in the back corner of the room suggesting, 'Hey, how about we build a diesel racecar'. After the ensuing laughter died down, the chiefs looked at one another, stunned in the realization that that was exactly what they were going to do. And they couldn't make that car lose either. Don't be surprised if you see TDI technology turn some heads -- the introduction of the new 1.9 TDI A3 has patrons flabbergasted -- 52 mpg, and 325% more fun than a Prius.

So what's in the future for Audi? If you ask me, it will be an effort to mirror Porsche -- which, has long-since been the most profitable automobile company in history. In fact, Porsche has so much clout, that they have denied all who seek to open a new Porsche store in the US. They feel they have enough stores -- more would be too much, and they certainly aren't willing to produce any more cars. Supply low, Demand high.

If you asked me where Audi dealerships would be in another ten years, I would tell you that it would be much like a Maserati, Porsche, Bentley, or Ferrari store. Prices will have climbed enough to knock out the middle class entirely, and everyone from the upper middle class to the über-rich would have to wait two weeks to get an appointment to drive one. Dealerships will be harder to find, but will become museum-like edifices canonizing the greatness of the marque -- equal in design and beauty to the cars."


I found it interesting and thought I would share!

 

It is interesting, but I don't see it happening, I mean I don't think the company would want to push itself upscale that much. Maybe have a few models in the Ferrari range, but having your whole line wouldn't really follow the spirit that I feel the company has.

 

I agree completely CAB, Audi is a great company and they know where they want to be, they've recently starded to seriously dable in the supercar realm with the R8 FSI and now the TDI but as far as to say they're going to move into a strict uber high class car I'm not sure.

That IS a great read however Woodhead, great insight for sure! Porsche should stay how it is, I wouldn't want to see them turn into a mass car producer, they're perfect the way they are also

 

interesting stuff indeed...
good read.

 

I can't see this happening either. I mean, he makes no mention of BMW (granted it's not a Porsche-owned company). If he forsees this happening to Audi, then BMW would have a tricky situation on their hands. Do they stay competative and raise their line of vehicles also? Or just give up, and maintain their line as is; offering affordable luxury to middle-class citizans.

If it's the first, then i would forsee Volvo jumping into this scenario as well. I honestly believe this would cause a domino effect until the point where the next thing you know, KIA is considered middle-class luxury.

The guy knows his Audi's, but i seriously doubt Audi would risk losing their customer-base to tailor to the rich. My $.02