Is Audi Losing Their Technology Edge?

Assuming all other things are equal, a sudden drop in R&D spending by Audi to levels below its competitors would be cause to sit up and take notice. But that's a false assumption, because all other things are NOT equal.

The question I'd say is relevant: Where is Audi today? They seem to be riding a high of record profits, record unit sales, and strong market share. I'd have to say those are not signs of a company in trouble. Guessing about tomorrow is...well...guessing.

(BTW, I'm not a fan of Audi's uninspiring external styling in most cases, so I guess that disqualifies me as an Audi fan-boy).

Yes and no @TheSteve. Yes, Audi is riding a great wave right now but if they are "resting on their laurels", as seems to be the perception, and not spending on R&D, then very soon, they will be playing catch-up again. Look at a company like Honda/Acura who were setting benchmarks and trends, then clearly, they stopped progressing and seemed to be disinterested in being truly innovative, and now they're playing catch-up because everyone else has advanced.

@cidflekken, your view is based on the premise that a short-term observation becomes a long-term trend, AND all other things are equal (e.g., assuming everyone is at exactly the same state of technological "innovation.") **IF**, for example, Audi's previous R&D expenditures had 8 year's worth of innovation waiting to be put into 3-year production cycles, then they could afford to ease up on R&D spending for a SHORT time (but not for a decade).

This is just an alarmist "The Sky is Falling" article, much like the "What Can Save Apple?" articles we've seen in the media in the past year or more.

@TheSteve, (not asking this to be confrontational, btw), but where or what is the technology that Audi is currently working on? It DOES appear that BMW and Mercedes seem to be progressing in product development at a neck-breaking pace at this point, product development that is pretty distinct from the competition. Again, Audi makes some incredible products today, but how long can they rely on that. LED headlight "innovations" can't carry that torch for too long. In many ways, Nuttie's response with clean-diesel, more SUVs and exterior design supports this author's assertion. If anyone knows what Audi is working on, it's Nuttie and the fact is, pretty much every company already has solid diesel offerings, robust SUV models, and distinct design.

The reality is that, in this day and age of technological advancement, no company, in any flavor of business can afford to 'take a rest' from R&D. Look what happened to Nokia and Motorola, two previous leaders of cell phone technology. They have been completely left in the dust by Apple and Samsung, in a few scant years. And no matter what they introduce today, they're lost in the race. Even more cogent to the point is Blackberry who used to be the smartphone of choice and now they're an also-ran among private users and slowly being phased out from corporate usage.

@cidflekken: I have no data on the state of Audi's R&D, their R&D spending, or the know-how they have already accumulated but have not yet put into production, so I make no speculations. Unfortunately, this article does not hold itself to the same high standards to which I hold myself.

Please feel free to engage in wild speculation on the imagined impact the minutest tidbit of "information" might have on an enterprise the size of Audi. That's what this article does.

Just for fun, consider documenting your concerns about Audi "losing their technology edge" (as this article speculatively posits), and your perceived outcome, and revisit them in 5 years to see how your worry matches up to reality.

You could say that BMW's huge R&D costs have had a severe negative impact on its profitability. Audi is betting on clean-diesel adoption in the United States, a growing lineup of SUVs, and a differentiated and more aggressive exterior design strategy.

With a higher profit margin than BMW and Mercedes-Benz, cost savings due to being part of Volkswagen Auto Group when compared to BMW and Mercedes-Benz, and winning comparison tests against its competition on a regular basis, Audi is certainly not losing its technology edge.

The article continuously points out how Audi's cars are packed with some of the most advanced technology in the luxury segment. Just because Audi doesn't spend as much as BMW and Mercedes-Benz on research and development does not mean it will fall behind.

Remember, it costs Audi less to produce a vehicle than it does BMW and Mercedes-Benz and its research and development costs are spread across the Volkswagen Auto Group and will therefore be lower than BMW's and Mercedes-Benz's.

Also, the comparision between the A8 an S-Class is a bit fraudlent. MB just released a new S-Class. The A8 is mid cycle. Major technology changes follow with a new launch. The new A3 is highly competitive compared to the CLA and has beat it in many comparos so far. So the article lacks research.

They never had a technology edge. Which butt crack did you grab that out of?

Yeah, a stupid article. Audi is a wholly owned subsidiary of Volkswagen, the R & D still gets done, VW just move money around until Audi's balance sheet looks exactly how they want it to. Fortunately for Audi they don't have to answer to shareholders.

Audi is progressing just fine. I've owned a couple 3 series (liked them all) and a couple of 5ers too. They were very good cars, but several years ago. Audit has a very nice product - the craftsmanship is there. I don't need a car that is "radical". Continue to tweak and improve things. BMW is now trying to cater to the Cadillac folks with it's ride and handling, the sports car folks too and any other focus group. That's why I switched. If you are wanting to buy a German engineered car, you don't necessary buy it for (more) reliability than (say) a Japanese made car. I buy German vehicles because of the great handling, high performance and how they hug the road like a rail. I own an Audi 6er and really enjoy it more than my last 5er. I think this is nothing more than "The Sky is Falling" episode. Does Autospies have nothing better to offer readers other than some 2nd hand story.

Seeing that none of us really know whats actually going on in these largest corporations (Audi, BMW, Merc,...) we can only make assumptions based on what we see in their product portfolios. For years, Audi has been playing catch up and now it really looks like they've succeeded. They have a lot of momentum which threatens their competition so it's only logical that they start pouring more money into R&D. BMW appears to have spent a large chunk on carbon fiber development while Audi spent a large amount on aluminiun frames. If the carbon fiber research is more expensive than aluminium research, does that really make one company ahead of another? It's a pretty silly way of looking at things in my opinion. Mercedes has a huge portfolio of products compared to Audi so it shouldn't be surprising that they spend more on R&D, they make more things so they have more stuff to research. Anyway, I've owned the Audi B6, B7, and B8 A4s and they were all great cars and I currently have a BMW F30. I'm looking forward to the idea of the next gen A3 or A4 because the F30 just isn't a big enough step forward from the B8. Spending lots on R&D doesn't mean you automatically get much further ahead...