Audi to raise prices in the next 5 years
10-11-06, 02:27 PM
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Audi to raise prices in the next 5 years
VW's Audi looks to close U.S. pricing gap
http://today.reuters.com/news/articl...c=66&type=qcna
NEW YORK, Oct 11 (Reuters) - German auto maker Audi (NSUG.DE: Quote, Profile, Research) on Wednesday said it planned to gradually raise car prices in the United States as it seeks to return to profitability and close the gap with other premium brands in the world's largest auto market.
Audi, Volkswagen's (VOWG.DE: Quote, Profile, Research) premium unit, sells its cars for about 4 percent less than rivals BMW (BMWG.DE: Quote, Profile, Research) and Mercedes-Benz (DCXGn.DE: Quote, Profile, Research), stifled by a weaker image, said Johan de Nysschen, executive vice president in charge of Auburn Hills, Michigan-based Audi of America Inc.
"We want to close this gap in five years," he told reporters in New York.
The car maker, he said, planned to raise its prices over time as it launches new models and improves its brand image and dealer network. "You can't push pricing too quickly," said de Nysschen.
To improve its image, Audi is considering showcasing its cars in more product placements like it did in the science fiction movie "I, Robot."
In the Spring, it also held "lifestyle" events that offered test drives and featured partners such as exotic travel company Abercrombie & Kent, upscale stereo maker Bang & Olufsen, and motorcycle maker Ducati.
De Nysschen and other Audi executives were in New York for the opening of an Audi Forum - a 6,400-square foot showroom on Manhattan's well-heeled Park Avenue, which de Nysschen said is one of Audi's efforts to improve its brand image.
The showroom, which features an 8-foot by 6-foot high-definition video screen that meanders along the ceiling, can display up to five cars and offers passersby the opportunity to learn more about the brand.
The New York Audi Forum is the first showroom of its kind in the U.S. and the company's ninth worldwide. It is a marketing rather than a sales venue. Any cars sold at the New York site, for instance, will be delivered by a local dealer.
Audi is considering similar facilities in Los Angeles and Miami, de Nysschen said.
Audi aims to be break-even in the U.S. this year and be profitable next year, after posting a loss last year.
The brand, which is known by four interlocked rings, expects 2006 sales to top 86,000 cars, which would mark Audi's best-ever U.S sales performance since 2003, de Nysschen said.
Breaking the 100,000 mark for annual car sales was "possible" in 2008, amid expectations of a 3 percent to 5 percent rise in Audi U.S. sales next year, he added. Audi sold 83,000 cars in 2005.
Audi, Volkswagen's (VOWG.DE: Quote, Profile, Research) premium unit, sells its cars for about 4 percent less than rivals BMW (BMWG.DE: Quote, Profile, Research) and Mercedes-Benz (DCXGn.DE: Quote, Profile, Research), stifled by a weaker image, said Johan de Nysschen, executive vice president in charge of Auburn Hills, Michigan-based Audi of America Inc.
"We want to close this gap in five years," he told reporters in New York.
The car maker, he said, planned to raise its prices over time as it launches new models and improves its brand image and dealer network. "You can't push pricing too quickly," said de Nysschen.
To improve its image, Audi is considering showcasing its cars in more product placements like it did in the science fiction movie "I, Robot."
In the Spring, it also held "lifestyle" events that offered test drives and featured partners such as exotic travel company Abercrombie & Kent, upscale stereo maker Bang & Olufsen, and motorcycle maker Ducati.
De Nysschen and other Audi executives were in New York for the opening of an Audi Forum - a 6,400-square foot showroom on Manhattan's well-heeled Park Avenue, which de Nysschen said is one of Audi's efforts to improve its brand image.
The showroom, which features an 8-foot by 6-foot high-definition video screen that meanders along the ceiling, can display up to five cars and offers passersby the opportunity to learn more about the brand.
The New York Audi Forum is the first showroom of its kind in the U.S. and the company's ninth worldwide. It is a marketing rather than a sales venue. Any cars sold at the New York site, for instance, will be delivered by a local dealer.
Audi is considering similar facilities in Los Angeles and Miami, de Nysschen said.
Audi aims to be break-even in the U.S. this year and be profitable next year, after posting a loss last year.
The brand, which is known by four interlocked rings, expects 2006 sales to top 86,000 cars, which would mark Audi's best-ever U.S sales performance since 2003, de Nysschen said.
Breaking the 100,000 mark for annual car sales was "possible" in 2008, amid expectations of a 3 percent to 5 percent rise in Audi U.S. sales next year, he added. Audi sold 83,000 cars in 2005.
http://today.reuters.com/news/articl...c=66&type=qcna
10-11-06, 02:49 PM
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Good for them, I believe Dell said they would never get into the 'Under-one thousand dollar computer market' either.
The point is, they can raise prices all they want, will that make people buy more or less?
I think the trick would be to raise demand so that the demand is greater than the supply, then they can charge what ever they want. a-la Ferrari and a-la Mini (for example).
That will never happen (IMO) b/c Audi is not going to be able to have as much demand as some other Luxury cars. Unless Audi turns around and becomes one of the most dependible cars in the market.
I don't see any German company as being thought of as reliable any more.
The point is, they can raise prices all they want, will that make people buy more or less?
I think the trick would be to raise demand so that the demand is greater than the supply, then they can charge what ever they want. a-la Ferrari and a-la Mini (for example).
That will never happen (IMO) b/c Audi is not going to be able to have as much demand as some other Luxury cars. Unless Audi turns around and becomes one of the most dependible cars in the market.
I don't see any German company as being thought of as reliable any more.
Last edited by rai; 10-11-06 at 02:52 PM.
10-11-06, 03:33 PM
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I don't see any German company as being thought of as reliable any more.
More to the point though, with the right marketing, I can see Audi pulling this off. They are more popular than ever and offer serious competition bmw and mb. They may not need to improve reliability too much, perhaps bmw and mercedes will just meet them half-way. :-)
Last edited by roguenode; 10-11-06 at 03:36 PM.
10-11-06, 04:18 PM
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Audi is really getting serious. They reorganized their site, and also hired a new marketing company, and the ads a very slick and "upscale", like what Lexus has got.
40% of Lexus buyers initially walk into a showroom because of a tv ad they saw.
40% of Lexus buyers initially walk into a showroom because of a tv ad they saw.
10-11-06, 05:07 PM
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Check out the new TT's mini-site, I recommend checking out the video section. Some pretty cool videos: http://microsites.audiusa.com/AudiTT...ml?language=en
The S-line microsite is pretty cool too: http://microsites.audiusa.com/s-models/
Last edited by mavericck; 10-11-06 at 05:11 PM.
10-11-06, 05:09 PM
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No, it's because they want to be recognized by the ignorant Americans as the equal and some cases superior to their German rivals and competition around the world.
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10-11-06, 05:13 PM
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I've always been a fan of Audis but have never seriously considered buying one when making car purchases. However I do love their products overall and love the direction they are going design wise. That said, I don't have any forseeable plans to purchase an Audi anytime soon. I wish them well in their aspirations regarding price increases and would like to see how this plays out in the market.
While I understand profit, I just hope they don't short change the consumer in this process. That's my chief concern. I've always looked at Audi being 3rd pricewise out of the 4 "Luxury" brands. MB, BMW ahead of them and our Lexus being last in that tier. Again this is just in terms of pricing, so I'd like to see where this goes.
While I understand profit, I just hope they don't short change the consumer in this process. That's my chief concern. I've always looked at Audi being 3rd pricewise out of the 4 "Luxury" brands. MB, BMW ahead of them and our Lexus being last in that tier. Again this is just in terms of pricing, so I'd like to see where this goes.
Last edited by LexLaw; 10-11-06 at 05:16 PM.
10-11-06, 06:42 PM
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10-11-06, 08:23 PM
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raising the price of these cars would really price them out since a lot of the euro/german shoppers that look at mercedes or bmw end up buying Audi's because it was less expensive. Now they have to make things more attractive to potential buyers to make them want to go w/ the 4 rings. Kind of tough when BMW is offering 4 years of maintenance...not sure if Audi reinistated that?
Plus they need to update their dealer network and inform them that their clientele is luxury upscale people so stop treating them like VW owners.
Plus they need to update their dealer network and inform them that their clientele is luxury upscale people so stop treating them like VW owners.
10-11-06, 08:39 PM
#11
One thing I heard this from my aunt that Audi quality costs of service into the car already, if so why dont all car companies do that?
Only Audi I ever would consider buying is the R8, but no use when the LF comes out.
Lexus until the day I die or until I win a huge jackpot, too switch to Aston Martin.
Only Audi I ever would consider buying is the R8, but no use when the LF comes out.
Lexus until the day I die or until I win a huge jackpot, too switch to Aston Martin.
10-12-06, 03:35 AM
#12
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Talk. That's all it is......a bunch of talk. Two basic things will determine Audi prices in the next 5 years....demand for their products and the cost of producing them, not a bunch of public relations hype.
10-12-06, 06:46 AM
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I could see Audi doing this in my Mexican market. When I first came down here in 2002, I was shocked that many considered Audi better than BMW or Mercedes. Turns out that Audi has done a superb advertising job down here and created an excellent, exclusive image for themselves. Even the low-priced A3 is often favored over the 3 series. I still scratch my head on this. 
10-12-06, 08:36 AM
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However there is also the chance that it will have a negative affect on sales by alienating the people who would have bought an Audi because they saw it as a better buy. Audi is betting on the former idea though. We'll see if it works, I wish them luck.