Keeping Up With Demand Is Proving To Be Audi's Biggest Problem Of 2011

"Keeping Up With Demand Is Proving To Be Audi's Biggest Problem Of 2011"

And what a "problem" to have! All car makers should be that lucky!

Audi is rolling, but a 10-month wait for a Q7? Where? The Q7 hardly sells in the U.S., the world's largest SUV market. And before I get flamed, even with Q7 sales up 42% over 2010 they only sold 3300 from January through May, which is about as many Q7's in five months as BMW and Benz sell X5's and GL's every month. When a 42% improvement over last year still means getting outsold 5-1 by each of their primary competitors, sales aren't good, they just moved up the ladder from heinous to terrible. If there's a 10 month wait for one here it's because Audi just chooses not to build more, not because they can't supply enough.

Audi probably builds so few that any kind of demand overwhelms production. Audi is known for not having the most efficent supply chain. The A1 and A3's on the other hand probably have no problem being made since they come out of VW factories. The A1/3's are the models that really fluff up the sales sheets.

being an Audi fan I wanted to boost your comment but at the same time I wanted to deboost it for the latter half but I chose not to do either because it was a great comment.

Typical Ignorant Bullshit.

Audi is on record as not being too interested in the US market as the weak US $ make sales over there not very profitable.

When the Q7 was launched the UK / European demand was so good that they did not even bother to advertise it in the USA.

This Idea that a company would perish if it did not sell vehicles in the USA is really getting old.

Grow Up.

I95,

1) no one said they're perish if they didn't sell in the U.S. But the U.S. is the largest market in the world for large SUV's, period. Audi wants to sell SUV's here. The Q5 sells great here. You don't think they'd love results like that with the Q7? Of course they would. They just haven't been able to get those results with the Q7, even though BMW sells thousands of X3's and X5's each month and Mercedes sells thousands of GLK's, ML's, and GL's each month.

2) You're out of your mind if you don't think Audi advertised the Q7 when it came out. They advertised it constantly. They even offered a lease program early on where the lease factor was the equivalent of 0% interest to move the thing (I remember cross shopping the Q7 and the new X5 back in 2008 and the leases were almost twice as expensive on the X5). And despite that, the Q7 still didn't sell.

3) To say Audi "wasn't interested in selling it here because of the weak dollar" might make sense... if you were talking about a cheaper car. Like the Q3, for example, which (surprise) Audi announced they have no plans to bring here. The more expensive the car, the higher the margins are. In fact, those higher profit margins on more expensive cars is what allows manufacturers to sell less expensive cars here, because THOSE are the ones that don't make anything for the manufacturer. If Audi thought the Q7 couldn't make money because of the weak dollar, they wouldn't be selling as many Q5's as they are, because those make less per vehicle than the Q7 would... if the Q7 were selling.

Your statements about Audi "choosing" not to sell the Q7 here "because they don't really care" are the equivalent of getting turned down by the hot girl at the bar and then telling your friends she was ugly up close anyway. No, she wasn't. And yes, they do.

A1s and A3s are NOT made in VW factories. The Belgium factory is specific to A1 production, and the A3 is made at Audi's Inglostadt factory. The Q7 is made in the same factory as the Toureg and the Cayenne, but the Q7 has its own production line separate from the other ones.

As for "fluffing up sales sheets" you should really investigate and do some fact checking before saying random statements with no basis to them. No different than BMW or Mercedes-Benz, Audi's sales are highly competitive in the middle and upper ranges just like the other German brands. They all sell entry level luxury premium cars so Audi isn't doing anything new. Obviously, you back handed dig against Audi has not factual basis. Just look at A7 sales already.

The A7 is a trend vehicle it will sell well until something new comes along.

"total sales in Europe grew 13.5 percent to about 382,850 cars, with the main drivers of growth being Audi A1 and A8."

The A1 is positioned farther down market than anything with a BMW, or Mercedes badge. The further down market you go the higher the sales volumes. A1 goes against the Mini, but Audi fanboys start whining when you add mini to the sales. Regardless BMW still sold more vehicles without a car as cheap as the A1 in there lineup...

Sales numbers are irrelevant though, I think Mercedes makes nicer cars than both.

All of the German automakers are having "fun" trying to keep up with the demand on their cars. Last year around July 7,2010 I ordered my new S4 and took deliver the last day in October. I just went to the dealer to order my 2012 A6 and he told me it would be 4 months minimum before it arrives. I don't mind waiting but wish I had it in 6-7 weeks. I order a new one each year since I have family that work for Audi of America in Auburn Hills, Mich. I would have thought they could build their cars in a shorter amount of time but all of the German automakers are experiencing this type of demand.

@Nonofyobus: On my 2012 A6 the dealer told me it could be 4 months easily. If the dealer has a car already "On Order", the car sits for 14 days in a "hold bin" before the dealer's request is actually processed to build it. This allows the dealer to go into cars "On Order" and make any specific package, color, option changes before Audi pulls the car specs into actual build or production.

The dealer I spoke with said he had an A6 Ice Silver in the "hold bin" that I could still swap out the interior black for the light Titanium Gray I preferred. (Never been much for black interior since it's hot here). For the S4, that's build process is even longer. Customers don't realize that each dealership gets maybe 6-8 S4's per year (if they're lucky). They are very limited. When you order an S4, it sits in the hold bin for 2 months BEFORE it even moves to production. This can be verified by opening the door and reading that small plate inside the door area. With a nearly 4 month build time including paperwork processing, plus 2 month hold bin process, it could easily be 5-6 months before you see the S4.

I'd like to take a European delivery one time. I think that would be cool but need someone to tell me how that aspect of the purchase goes. Having family working for Audi/VW has it perks.

Having to wait six months for an S4 is ridiculous, that's the very definition of "artificial supply constraints". They did the same thing with the A5/S5 when they came out, only importing a few hundred a month. Those are "normal" cars, not limited edition collector models, and they were bringing over a few hundred a month so they were impossible to get. I wonder how many buyers Audi loses to 335i's/335xi's/335is's/M3's, CTS's, C350's/C63's, etc. just because they choose not to build the cars buyers want. But hey, at least they can brag about demand outstripping supply and huge wait times. Apparently it's working, since that's what the press reports.

How is that any of your business ?

You think you know more than the Executives at Audi who choose not to have an oversupply of vehicles ?

I guess the GM / FORD model of stuffing dealerships full of vehicles and then panicking at the end of every financial year worked so well for them.

It makes perfect sense for clients who want vehicles to wait a little while for it. If i know my lease is up in 6 months, i start shopping now for a new vehicle. If i decide i want a new vehicle, i am willing to wait 4 months for one i like. If you don't, cool, you are free to choose another manufacturer.

You're taking this awfully personally -- are you one of those Audi executives? I might not know more than the Audi execs, but I do remember Business 101 - to maximize sales and profit, figure out how many of something you can sell, and then build one less than that. No one is saying Audi should have an oversupply. I'm saying they should have the RIGHT supply.

I already said I agree with you about selling the low margin cars in other markets that are more profitable. BMW is doing that with the X1. Audi's planning on doing it with the Q3. But again, in the case of the X1 that's because those are low margin vehicles THAT ARE AT ALREADY AT FULL CAPACITY. The plant can't build more, every vehicle they'd send to the U.S. means taking away vehicles from other sold out markets where they're more profitable. And that would be stupid. That's not the case with the Q7. It's only "wait listed" because it's not selling, Audi could easily build more of them. They could build and sell more S4/A5/S5 models (and here's why that's important -- people actually DO want those). They don't need to flood the market with them, but I can guarantee you there will be some people who won't wait 6 months and will get something else. Again, figure out how many you can sell, and then build one less. There should never be a 10 month wait for anything that doesn't have a prancing horse, bull, or winged lady on the hood. An S4/A5/S5 isn't a Ferrari. A Q7 for damn sure isn't. If there's a wait list for a car they could build more of and still sell without rebating, then what you have is a production and/or ordering system inefficiency. You are COSTING your company money. Figure out how many you can sell, and build one less.

JRobUSC: I definitely agree with you. Only thing I like about ordering my car is I get the EXACT car wanted, without all those unneccessary options. Example: I will NOT buy that "Innovation Package" costing almost $3500 as an option. I don't need a heads-up display. I also love great sounding music in my car, but do I really need a $5800 upgraded stereo option. The standard Bose sound system at 630 watts, 14 speakers is fine for me. I probably can't tell the difference between the standard stereo and one costing $5800 more.

I think BMW and Mercedes are getting their vehicles to customers sooner than 5-6 months. S4 model is a rare and limited production model; I guess like the BMW M3.

I will say this AGAIN

Audi makes MUCH LESS profit on the vehicles it sells in the USA compared to the ones it sells in UK / Europe and the rest of the world.

I do not know why this simple fact seems to escape what are supposed to be adults.

BMW Started producing the X5 / X3 and X6 in the USA so as to reduce its unit costs for its supposed "Largest Market for Large SUVs" hence it makes more profits per unit on those vehicles.

Simple research on MRSP in different continents and a quick Currency Exchange check will prove me right.

So again i ask. WHY SHOULD AUDI HAVE AN OVERSUPPLY OF VEHICLES IN THE USA WHEN IT MAKES MORE MONEY IN OTHER COUNTRIES ON THOSE SAME VEHICLES ?

JRobUSC
Try to answer that one question logically.

see above, hopefully that's logical enough for you to understand.

BTW My Good friend is Regional Manager for Audi in one of the UK Regions so when i write stuff on here, it is not some fiction. It is FACT.

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