Audi's New A3 Threatening BMW's Sales Lead, How Long Until They Realize Price, Not Volume, Is The Key?

Once BMW has its own "Jetta GLI" it will outpace Audi

How long before Autospies readers learn that GermanNut and Agent009 are the same person?

How long before Autospies readers learn JRobUSC tries and fails miserably to be BMW's knight in shining armor?

The bottom line is all three luxury brands (Audi, BMW and Mercedes-Benz) are chasing volume at the expense of profitability. They would rather sell a lot of low-priced, high-volume, low margin compact vehicles like the Audi A3 Sedan, BMW X1 and Mercedes-Benz CLA and see their sales numbers rise rather than try to grow the high-end of the market.

The reason for this is simple. There are a huge number of younger people in China and the U.S. that want to buy a luxury vehicle but don't want to spend a lot of money. The German luxury brands hope that these buyers will upgrade to the more expensive models in the future. So, while it maybe a strategy that threatens profitability in the short-term, in the long-term it could be a strategy that pays huge dividends for the German 3.

Here is where Audi has a distinct advantage due to economies of scale. By being part of the Volkswagen Auto Group, Audi can shares parts, platforms and R&D with other Volkswagen Auto Group brands such as Porsche, Bentley, Volkswagen etc.

The negative impact of Audi's A3 Sedan on its profit margin is mitigated due to this and the extra profit Audi receives due to its lower production cost is re-invested into the company to create newer models.

Audi's rise over the past 5 years to become a major global luxury brand going from third place to closing in on the top spot has been precisely because of these cost savings and a savvy ability to create highly-desirable products.

were you not just saying about a year ago, that BMW was bringing down the value of the brand for going down market. Yet a Year later you praise Audi for going even farther down market to below the $30k range. Pretty hypocritical would you not say? Yet coming from you and Agent009 that is to be expected as Audi can do no wrong..... too funny

When these "luxury" sales races comes down to entry-level sales, then they are no longer "luxury" races.

Well put.

This is a pointless pissing contest.

Volume chasing didn't work so well for Toyota now did it? I could care less who sells the most cars, what's more important is who makes the best. Duh

If I were a "luxury" automaker I would NOT move down scale to sell a "cheaper" version (the $29,900 car). Some of the loyalist may feel this dilutes the brand image or luxury status they look for. Let the Toyota's, Honda and Nissan deal with the below $30K market line. Let the premium car makers do what all of them do best: sell PREMIUM, LUXURY sports cars and sedans.

The line between "luxury" and "just another brand" is becoming increasingly blurry.

You can get features in a Hyundai Equus that are normally found only in high-end luxury marques like Audi, BMW and Mercedes-Benz. You can get an Audi, BMW or Mercedes-Benz for less than you can a Hyundai Genesis or Equus.

The luxury brands obviously want wider popularity. To gain a larger loyal following they have to cut prices so that the middle class can afford to buy their vehicles. True financial loyalty is attained by owning and driving the car not just by ogling over pictures in a glossy magazine.
The only way to cut prices without compromising quality is to make smaller vehicles which is what the big three Teutonics are doing.