BMW Signals It Can No Longer Keep Up With Audi In Global Sales Race

Hey readers, all we're talking about is who sells the most units.

To me, that's not such a big deal. Who cares if it's BMW or Audi, or at one time it was Mercedes and another Lexus. What matters to *me* is what my experience will be like with the car! Will I love the look and feel? Will it have fine workmanship? Will it be reasonably reliable, and free of defects? When it needs fixing, will the repair costs be insane? Will the car last, or feel like a clunker a few short years after ownership? Will I see rust during its lifetime? All these factors are important to *me*, a prospective buyer, and "unit sales" doesn't speak to any of them.

I just thought I'd put this into perspective, just in case someone interprets this to mean "highest unit sales = we're the best."

What is mentioned in this article is exactly the trend I mentioned in the "Tier 2" post. Audi is focusing on the lower-end of the market to impact their sales results and I'm not sure, as a luxury automaker, that this will help Audi long-term.

Agreed.

And as long as low sales don't affect R&D let the brands find their own niches and the place they feel comfortable in each market. Who wants to see rolls royces at every corner? Such thing would only dilute the brand and ultimately work against it.

I personally want Audi to sell more than BMW and Mercedes so that the legacy I perceive in each of those brands stays the same: 1) Merc 2)BMW 3) Audi 4) Lexus, etc...

BMW CEO Norbert Reithofer is correct when he says that sales volume is not the most important thing. Profitability is more important than sales volume.

Audi has been able to achieve such impressive sales growth over the past 5 years to the point where it has moved from third place globally to very likely overtaking BMW for the number one global sales spot this year or next because it has a higher profit margin than BMW. By being a part of the Volkswagen Auto Group, Audi benefits from economies of scale created by its ability to share parts, platforms, etc. from other Volkswagen Auto Group brands such as Porsche, Bentley, Volkswagen and its wholly-owned subsidiary Lamborghini. This in turn drives down Audi's costs of production and increases its profit margin.

BMW is an independent company and Mercedes-Benz is a subsidiary of Daimler AG. These corporate structures do not allow BMW and Mercedes-Benz to benefit from economies of scale the way Audi does and therefore their costs to produce a new vehicle are significantly higher than Audi's. As a result, Audi has more money left over to re-invest in its business for things like new model development, manufacturing capabilities and research and development. Audi is investing an astounding $29 billion through 2018 alone on these three important areas.

As a result, Audi can create vehicles with very luxurious interiors of the highest quality materials and best ergonomics, cutting-edge technology features, blistering performance and improved reliability.

You are seeing these trends take place right now in the marketplace and as a result Audi is now in the top global sales spot.

Hey GermanNut, I truly hope you're right. All I know for sure is that Audi has the sales numbers. I don't know if that currently translates, or will eventually translate into fewer defects, increased vehicle longevity (slow degradation), lower maintenance or repair costs, or increased fit and finish.

As a specific example, we know that Audi and VW share engines, such as the 2 liter 4 cylinder turbo and the 3 liter V6 diesel turbo. Audi/Volkswagen group enjoys the obvious financial benefits from this arrangement, but how does the consumer benefit? Does it mean that VWs benefit from BMW-like Audi engines, or are premium Audies equipped with ordinary engines found in economy VW vehicles? I don't know the answer, but I can tell you I passed up the 2 liter 4 cylinder turbo engine when I learned that common complaints amongst Audi/VW owners are (a) these engines often drink oil at a rate of 1 quart per 1000 miles, and a less frequent complaint, (b) their real-world fuel economy is unimpressive.

I recently ordered a 2015 Audi Q5 3.0 Diesel. Major attractors for me were interior and exterior styling, handling, a high level of apparent fit and finish, and an engine that delivers both power (428 ft-lbs torque) as well as commendably good real-world fuel economy (37 MPG highway, according to owners). I *HOPE* it'll be no worse than my last 4 BMWs in terms of initial defects, repair frequency, longevity (slow degradation), and cost of ownership. These things matter to me. How many units Audi sells? Not so much.

Selling the most units is not such a big accomplishment if said vehicles have serious quality/reliability/durability issues. I say to BMW: Let Audi "win" and you can continue building more reliable products as you do now.