Audi Ending 4 year Free Maintainence too . . .
02-21-06, 07:29 AM
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Audi Ending 4 year Free Maintainence too . . .
Automotive News / February 20, 2006 - 6:00 am
ORLANDO, Fla. -- Audi of America will end its free maintenance program beginning with the 2007 model year, much to the distress of dealers.
The four-year/50,000-mile program, called Audi Advantage, was established in the late 1980s as a way to restore consumer confidence and jump-start the brand in the United States. Only a few auto companies offer free maintenance, but one of them is BMW, a chief rival.
"They are getting rid of it because of costs. Dealers feel it is a large advantage," said Tom Harper after the make meeting. Harper is incoming chairman of the dealer council and owns Harper's Porsche-Audi-Jaguar-Volkswagen-Infiniti-Acura in Knoxville, Tenn.
Audi still will provide some free service in the first year of ownership.
Dealers want Audi to consider a modified program for repeat customers. "It is important to those who have a second or third car," Harper said.
There's no doubt some loyal customers may be disappointed, said Johan de Nysschen, executive vice president in charge of the Audi brand.
"There is that danger, I have to acknowledge it," he said.
But Audi needs money to fund a proposed increase in dealer margin, de Nysschen said.
He said he is committed to returning Audi to profitability.
"If we move into the environment where the customers are effectively not locked into the service by virtue of Audi Advantage being standard on the car, it will mean that we will have to work a little harder to attract and retain the customer," de Nysschen said.
Audi research shows that while the offer is valued by customers it is not a key factor in the purchase decision, he said.
On the warranty side, Audi said it will change policies on retention of parts, no longer requiring dealers to hold them for three months. Dealers will have to hold parts only for recently introduced vehicles.
Audi will pay to have parts returned to headquarters if a fault or problem is detected. Dealers previously bore the cost.
Dealers, especially those funding the expansion of their stores, told Audi they want more cars, de Nysschen said.
Audi announced that sales objectives are being changed from a preset goal for each dealer to a traditional turn-and-earn program based on how many cars each store sells.
ORLANDO, Fla. -- Audi of America will end its free maintenance program beginning with the 2007 model year, much to the distress of dealers.
The four-year/50,000-mile program, called Audi Advantage, was established in the late 1980s as a way to restore consumer confidence and jump-start the brand in the United States. Only a few auto companies offer free maintenance, but one of them is BMW, a chief rival.
"They are getting rid of it because of costs. Dealers feel it is a large advantage," said Tom Harper after the make meeting. Harper is incoming chairman of the dealer council and owns Harper's Porsche-Audi-Jaguar-Volkswagen-Infiniti-Acura in Knoxville, Tenn.
Audi still will provide some free service in the first year of ownership.
Dealers want Audi to consider a modified program for repeat customers. "It is important to those who have a second or third car," Harper said.
There's no doubt some loyal customers may be disappointed, said Johan de Nysschen, executive vice president in charge of the Audi brand.
"There is that danger, I have to acknowledge it," he said.
But Audi needs money to fund a proposed increase in dealer margin, de Nysschen said.
He said he is committed to returning Audi to profitability.
"If we move into the environment where the customers are effectively not locked into the service by virtue of Audi Advantage being standard on the car, it will mean that we will have to work a little harder to attract and retain the customer," de Nysschen said.
Audi research shows that while the offer is valued by customers it is not a key factor in the purchase decision, he said.
On the warranty side, Audi said it will change policies on retention of parts, no longer requiring dealers to hold them for three months. Dealers will have to hold parts only for recently introduced vehicles.
Audi will pay to have parts returned to headquarters if a fault or problem is detected. Dealers previously bore the cost.
Dealers, especially those funding the expansion of their stores, told Audi they want more cars, de Nysschen said.
Audi announced that sales objectives are being changed from a preset goal for each dealer to a traditional turn-and-earn program based on how many cars each store sells.
02-21-06, 08:39 AM
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In some ways it really doesn't make that much difference anyway. For instance, most of us at CL agree that a new vehicle should get its first oil change at the 1000-mile mark ( right after break-in ) to get the shavings out and then every 3-5 months and 3000-5000 miles afterward. ( Hondas and Acuras excepted because they use factory 3000-mile break-in oil ). Yet good luck getting a free oil change at 1000 miles...it's usually not going to happen. Even " free maintenance " programs like Audi's and BMW's usually only gave you service at 7500-mile intervals or when the dash light comes on for oil changes. So you still end up doing most of the necessary oil changes yourself.
02-21-06, 11:57 AM
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Originally Posted by mmarshall
In some ways it really doesn't make that much difference anyway. For instance, most of us at CL agree that a new vehicle should get its first oil change at the 1000-mile mark ( right after break-in ) to get the shavings out and then every 3-5 months and 3000-5000 miles afterward. ( Hondas and Acuras excepted because they use factory 3000-mile break-in oil ). Yet good luck getting a free oil change at 1000 miles...it's usually not going to happen. Even " free maintenance " programs like Audi's and BMW's usually only gave you service at 7500-mile intervals or when the dash light comes on for oil changes. So you still end up doing most of the necessary oil changes yourself.
02-21-06, 02:10 PM
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Originally Posted by picus
This is a good point. I've actually paid more for routine maintenance on my BMW than on my Infiniti because the "free" maintenance is so restricted.
02-21-06, 02:20 PM
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Originally Posted by diablo1
I still think this will hurt them big time. A lot of people say, well the reliability isn't the best, but it has free maintenance and a good warranty, and I'm only leasing, so it won't be a problem for me. Now that they are dropping that, I think people will pay a lot more attention to the reliability issues... Even if they put more effort and money into addressing QA, it will take several years for that to be reflected in their models and in JD Powers, Consumer Reports, etc. IMHO Audi is giving up one of the main things that keeps them competitive with BMW and with more reliable Japanese offerings. Bad news for their sales and for their dealerships, I'm sure.
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02-21-06, 05:06 PM
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Originally Posted by picus
This is a good point. I've actually paid more for routine maintenance on my BMW than on my Infiniti because the "free" maintenance is so restricted.
02-21-06, 07:24 PM
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Originally Posted by genearch
Let's not blend the warranty in with the free service. The free service is a real value. Take the case of my Infinifi FX. I just took it in for a 30K service, the tab was $850.00. I think I've paid a minimum of $250 each 7K miles. I'll need brakes in about 5K, likely another $350
I'd guess that the service costs up until the warranty expiration will be in the $2-2,500 range.
BMW offers this for free.. there is a true value there. but... BMW has also raised their oil change interval to 12K miles, where infiniti recommends 5 to 7,500.
Who knows if they will discontinue the free service as well, either way I'm covered.
I'm not sure I'd call it a marketing "tool" per se. The car is getting the manufacturer suggested service. Everything is covered with the exception of tires.
I'd guess that the service costs up until the warranty expiration will be in the $2-2,500 range.
BMW offers this for free.. there is a true value there. but... BMW has also raised their oil change interval to 12K miles, where infiniti recommends 5 to 7,500.
Who knows if they will discontinue the free service as well, either way I'm covered.
I'm not sure I'd call it a marketing "tool" per se. The car is getting the manufacturer suggested service. Everything is covered with the exception of tires.
BMW has to agree that the replacements are within the "normal parameters" of wear for the item being replaced. I've had my brakes replaced twice, and once I had to pay for it. Anyway, I've probably paid $1,500 or so in 4 years for maintenance on the BMW. So it isn't excessive, but it also isn't free. I'm not ragging on it - i'd definitely rather have it than not have it. I was just pointing out that it isn't "4 years of completely free maintenance" like they tend to market it.
02-21-06, 07:32 PM
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all about the profits...over recent years dealers have had to fight w/ audi to get somethings covered under warranty as they are coming down harder on reimbursing dealers for items that Audi doesnt feel like it's a warranty item...e.g. premature peeling of window switches and other buttons inside the vehicle...they blamed it on the acidity of the driver's skin.
02-21-06, 10:28 PM
#13
Originally Posted by genearch
Let's not blend the warranty in with the free service. The free service is a real value. Take the case of my Infinifi FX. I just took it in for a 30K service, the tab was $850.00. I think I've paid a minimum of $250 each 7K miles. I'll need brakes in about 5K, likely another $350
I'd guess that the service costs up until the warranty expiration will be in the $2-2,500 range.
BMW offers this for free.. there is a true value there. but... BMW has also raised their oil change interval to 12K miles, where infiniti recommends 5 to 7,500.
Who knows if they will discontinue the free service as well, either way I'm covered.
I'm not sure I'd call it a marketing "tool" per se. The car is getting the manufacturer suggested service. Everything is covered with the exception of tires.
I'd guess that the service costs up until the warranty expiration will be in the $2-2,500 range.
BMW offers this for free.. there is a true value there. but... BMW has also raised their oil change interval to 12K miles, where infiniti recommends 5 to 7,500.
Who knows if they will discontinue the free service as well, either way I'm covered.
I'm not sure I'd call it a marketing "tool" per se. The car is getting the manufacturer suggested service. Everything is covered with the exception of tires.
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