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Old 24th September 2008, 12:35   #1
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Default How Audi has missed the boat. AGAIN!

So, we were looking forward to a battle in the premium segment that's dominated by the Germans. Competition is, after all, a good thing. Look at what BMW did to Mercedes Benz within only a 2 year fight. Cheaper variants, smaller (and more practical) engines, higher specs, extended warranties....the list goes on and on.

Thus when Audi announced the launch of the fabulous A4, all of us were excited at what could have been a three-way battle in the 30+ lakh segment. How wrong could we have been! It seems that Audi has shot itself in the foot. I will tell you why:

Petrol A4 3.2 FSI:

The car is far-out! Literally....look up reviews on its stonking performance, great looks, unmatched handling and level of kit. But it is only imported as a CBU and sells for near 50 lakhs in Mumbai! Heck, that is 530D territory, a sedan that's not only from a larger segment but one that can also match / beat the A4 in performance. The wait period runs into 3 months!! We can safely assume that the A4 3.2FSI will stay an enthusiast's fantasy. And a reality for only 10 - 12 customers per month.

Mercedes + BMW sell a pretty healthy number of their petrol sedans. Reason? That's the entry point (read = cheapest variant). But the A4 doesn't have the option of a relatively basic petrol for first-time premium customers.

Diesel A4 2.0:

The diesel would then bring in the volumes, correct? Not quite:

1. For one, it is a FWD and lacks the superb road behaviour of the rear-wheel-driven BMW 3 series & Mercedes C Class.

2. It is sorely lacking on the power front. The Audi's 140 odd horses is comparable to last years C + 3. The 2008 spec 320D and C220 rate in the region of 170 BHP. Also, the A4 CVT tranny + steering are lazier than their German counterparts.

3. Brand equity : No contest. Mercedes + BMW enjoy far more recognition.

4. Sales network : Audi has only about 5 showrooms up and running in India. That is substantially lesser presence.

5. Sibling rivalry : What more do you get in a diesel A4 than a cheaper (and bigger) VW Passat?

Neither is the A4's rear seat all that supportive. So, the C220 has the A4 beaten on comfort (far better ride quality, superior seats) and the 320D is far better to drive. And if you are looking at a combination, the C does it pretty well.

I am very disappointed at the way that Audi has handled the A4. Unless they make amends, it is yet another opportunity gone.

Last edited by GTO : 24th September 2008 at 12:37. Reason: Adding point
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Old 24th September 2008, 14:36   #2
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Spot on, GTO !!

Your observations are absolutely correct.

In Chennai, Audi has only a resident manager ( so-called ); he has been telling me for the last 8 months that Audi is planning to open a dealership here within the next 3 months. Apparently, the Audi Bangalore dealer is planning to set-up shop here.

I spent some time evaluating the A4; I simply love the style and LED's in the front head-lamp cluster.

However, the Audi representative has very poor knowledge about the car. He does not have correct information on pricing as well and this changed 5 times during our discussions in 2 days.

They do not seem to carry a price list ( un-like any of the other car manufacturers ) and keep giving different prices every time you talk to them. Moreover, they are also not clear about the options ( like B&O, Drive system ) and you can forget about getting an accurate price on these add-ons from them.

If one were actually brave enough to buy an Audi from these guys in Chennai; here's the next interesting part. These guys do not know exactly what car colours are available in stock. In 1 day, I was informed at-least thrice on different colour combinations ( exterior and interior) that were in stock and then the Audi rep, later changed the same to different one.

You actually really need a lot of patience with these guys as they seem to have received very poor knowledge about Audi cars and do not even have the prices and other details on hand. One would be lucky to get a car of his/ her choice with the colour and interior combination that they desire.

Somehow, I have had this experience with all brands across the VW group - Audi, VW and Skoda. They seem to have this 'take it or leave it' attitude.

I did the latter and took my business to BMW, who are miles ahead than these guys, in my opinion.
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Old 24th September 2008, 17:45   #3
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Your poor sales experience with Audi is exactly what I am talking about. Audi makes it seem like they are in India only for the heck of it. They seem to lack any organisational skills. Even their ads are "imported"....there isn't an Indian element to them. I can't wait to see their monthly sales but can safely assume that they wont be a patch on the competition.

I am attaching a price / option list of the A4 with this post.

Quote:
Originally Posted by ecclipse78 View Post
If one were actually brave enough to buy an Audi from these guys in Chennai
You'd need that strength when your car needs a service!

Quote:
I did the latter and took my business to BMW, who are miles ahead than these guys, in my opinion.
Yup, the sales team from Benz + BMW is exceptional. Well-informed and courteous too.
Attached Files
File Type: pdf Audi A4 On Road Price.pdf (26.6 KB, 5877 views)
File Type: pdf Options.pdf (18.0 KB, 542 views)

Last edited by GTO : 24th September 2008 at 17:48.
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Old 24th September 2008, 18:00   #4
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Audi can only position themselves over VW, who again can only position themselves above Skoda.

Now Skoda has built itself up to be a 'Premium' brand, so VW is Super Premium and therefore Audi is ludicruosly premium. If I'm not mistaken, the Passat retails for around the C-class rates?

If they hope to do business with the Audi brand, they need to rethink their strategy for the whole group.
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Old 24th September 2008, 18:24   #5
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Well the scene here in Delhi / NCR is quite different. The Audi Dealership here in Gurgaon is very professional & upto date on all or any information one might want from them.

Their service station is running well, and I have seen no reason to complain about the dealership or the service workshop (so far)

No doubt the BMW is doing very well, infact the staff as mentioned above is courteous and definately a notch or two above the Audi dealer. The Merc Showroom leaves a lot to be desired though.

My feedback is based on first hand experience & not heresay. i can say I have no regrets buying the Audi, it was the most loaded option at the point of time that I bought it - with compareable engine power, and better features compared with the BMW options.

Now for sure the BMW "also" has most of the options on the highline as on the Audi A4. The BMW has got it all sorted out with the aggresively priced 5's & that may end up being my next car. They are also bringing in the X3 with a diesel engine (same as what runs on the 320d)

So all in all an interesting phase for the big 3



Cheers

Last edited by Ricky_63 : 24th September 2008 at 18:26.
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Old 24th September 2008, 18:37   #6
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Nice observations.

I believe that Audi could have done better with A4 by just getting the price right. A4 has got simply fantastic road presence as compared to BMW and Mercedes-Benz's respective competitors. But the weak section is again A.S & S. as compared to other two.

The other reason is that Audi tries to slot in between BMW and Mercedes-Benz by proving itself an all rounder. This makes Audi lose out on itself. Example : In 2002 ( if I am not wrong ), European Car Of The Year went to Peugeot 307. Now 307 wasn't the best one, but was good enough. It never tried to copy or be able to beat competitors at each and every place.

Audi is trying to beat each and every competetior and raising the bar for them. Audi tries to offer driving pleasure of BMW and effortlessness of Mercedes-Benz. A combination not easy to match. BMW manages to offer driving pleasure at the cost of ride quality and Mercedes-Benz does the opposite. This has made Audi a difficult proposition in India atleast. Audi managed to make successful entry because of its VFM package as compared to others. But once it gets wrong in this front, there is not much left. Mercedes-Benz and BMW are very big players and mostly they cannot be faulted on for what they are known, from the C-class/3-Series to S-class/7-Series. They manage to put in a very heavy dose of engineering for this. Audi must position itself as unique brand the way Lexus and Acura have managed, rather than be busy trying to figure out how to better the competetion.

Audi A4 needs a better diesel and they have it in the form of 2.7 TDI. If the current sales are 10-12 a month, then certainly, its bad strategy, and this means a lost opportunity.

My view is :
A4 : NEEDS 2.7 TDI, lower cost.
A6 : Not much to flaw about. Has everything.
A8 : Asks for more than S-class sometimes, not good.
Q7 : Huge for Indian roads. Anyone can get Porsche Cayanne or even M-class or X5 for the same money.

Last edited by aaggoswami : 24th September 2008 at 18:39.
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Old 24th September 2008, 18:40   #7
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How many A6's do you see anyway? They had a head start before the 5 came in officially
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Old 24th September 2008, 18:43   #8
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Default RE: audi dealership

Excel motors, who are the dealers for Mitsu in Delhi, have opened a separate dealership for Audi. I got a letter from them last week inviting me to their audi showroom.
Going by my earlier experience with excel [which has improved after i shot an email to Mitsu chennai] i can imagine how customer experience for an Audi would be with them
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Old 24th September 2008, 21:03   #9
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Quote:
Originally Posted by GTO View Post
Diesel A4 2.0:

The diesel would then bring in the volumes, correct? Not quite:

1. For one, it is a FWD and lacks the superb road behaviour of the rear-wheel-driven BMW 3 series & Mercedes C Class.

2. It is sorely lacking on the power front. The Audi's 140 odd horses is comparable to last years C + 3. The 2008 spec 320D and C220 rate in the region of 170 BHP. Also, the A4 CVT tranny + steering are lazier than their German counterparts.

3. Brand equity : No contest. Mercedes + BMW enjoy far more recognition.

4. Sales network : Audi has only about 5 showrooms up and running in India. That is substantially lesser presence.

5. Sibling rivalry : What more do you get in a diesel A4 than a cheaper (and bigger) VW Passat?

Neither is the A4's rear seat all that supportive. So, the C220 has the A4 beaten on comfort (far better ride quality, superior seats) and the 320D is far better to drive. And if you are looking at a combination, the C does it pretty well.

I am very disappointed at the way that Audi has handled the A4. Unless they make amends, it is yet another opportunity gone.
I think the 3.0 petrol AWD is just their image car and they are not interested in volumes. I wonder why they didn't launch their excellent 1.8 FSI turbo4 to go against the C200K.

1. May not be an issue for the target demographic, the Setji types who are chauffer driven.
2. Ditto as #1 but Audi do have a 170 horse version so a quick solution is in the pocket if needed.
3. Agreed. This is where the problem lies. They need to price according to percieved brand value.
4. This is a big one. Last year my uncle wanted to buy a 320i in Hyd but ended up with a Laura because no dealer.
5. yup, makes you wonder. But this has not been a issue in other markets where they have been selling side by side for decades.
6. Bottomline is that Audi needs to come in at around 5 lakhs less than Merc and BMW for it to make sense
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Old 24th September 2008, 21:12   #10
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Even i was expecting the new A4 to be best in the segment,but was disappointed to see the weak diesel engine(compared to C and 3)and front wheel drive.

Though audi has done a nice job of bringing the 3.2 quattro here but has completely lost out on pricing as base BMW5 and Merc E is available at similar price.
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Old 24th September 2008, 21:46   #11
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GTO,

Thanks for putting up the pricelist and option pack. You seem to have more information than the Audi rep. here in Chennai.

You are absolutely right when you say that they seem to be here for the heck of it. There is a world of difference when you interact with the BMW chaps here; they are a lot more courteous and upto date with the facts of their cars.

If you look at the Audi website ( India ), they are claiming some 163 percent growth in 7 months of 2008. ( someone mentioned this is due to the new A4 ). You can hardly call this any growth, as last year they did very poorly on the old A4, as people held back their decisions to purchase the same till this year. Also, indirectly they are admitting that they hardly sell any A6, A8 and Q7 then !!

I have been told that they plan to launch the A4 with the 3.0 TDI engine with Quattro early next year. This would surely be closer to 45 lacs on road.

I have no clue what these guys at Audi are upto, but believe me BMW and Merc are far more customer-centric and aggressive when compared with these guys; as they have a slew of launches planned next year ( at more practical price points) to counter Audi.
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Old 25th September 2008, 00:27   #12
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Quote:
Originally Posted by Mpower View Post
6. Bottomline is that Audi needs to come in at around 5 lakhs less than Merc and BMW for it to make sense
That's going to be really difficult MP & here's why:

1. Laura comes in at the following price points: 14.5L, 16.13L, 18.31L
2. Jetta (Which is the same car!) at: 14.09L, 15.43L, 18.07L
3. Passat: 24.xxL, 26.xxL
4. A4: 32L

If they reduce their prices by 5L, then they'll have to do similar reductions for the Laura/Jetta/Passat which will leave their whole strategy in tatters. And I'm not even bringing the Superb into the equation here!!

I think that if I were to say that the VW group is really confused about their strategy in India with every arm not knowing what the other is doing, it wouldn't be too off the mark. I think their intial success with the Octavia has given them a false impression that they can get away with this kind of pricing in our market!

P.S. All prices on-road Delhi.
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Old 25th September 2008, 02:31   #13
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Quote:
Originally Posted by iraghava View Post
If they reduce their prices by 5L, then they'll have to do similar reductions for the Laura/Jetta/Passat which will leave their whole strategy in tatters. And I'm not even bringing the Superb into the equation here!!
Well I guess they have to compete with each other just like the Jetta and Laura do. VW should have designed their cars differently enough so that they dont appeal to the same demographic. In the west, a high end 3 series will easily cost more than a low end 5.

Last edited by Mpower : 25th September 2008 at 04:04.
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Old 25th September 2008, 11:47   #14
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Wake up Audi you can do better than this with Such fantastic products.

See comp and make your Strategists do some brain teasing
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Old 25th September 2008, 20:08   #15
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Quote:
Originally Posted by Steeroid View Post
If I'm not mistaken, the Passat retails for around the C-class rates?
A notch lower, but the difference is not substantial. Anyone who spends 28 lakhs can stretch for another 3 - 4 lakhs more for a "premium" brand. This segment is hardly as price-sensitive as the sub 10 lakh.

Quote:
If they hope to do business with the Audi brand, they need to rethink their strategy for the whole group.
You bet. At the moment, Audi India is little more than a Choksi who imports cars for Indian clients.

Quote:
Originally Posted by aaggoswami View Post
Audi A4 needs a better diesel and they have it in the form of 2.7 TDI.
The 2.7 TDI will push up the price even more, and will not be able to match the efficiency of the smaller 2.0. They can easily offer the 2.0 diesel in a higher state of tune to match the C + 3.

Quote:
Originally Posted by ajmat View Post
How many A6's do you see anyway? They had a head start before the 5 came in officially
You said it! The 5 even sells more than the 3. To me, Audi India = Confusion. The A6 has ever changing engines + spec levels....even I am not too sure about what A6 variants they are selling at the moment. Audi needs a concrete strategy : dealer network, then model range and finally pricing.

Quote:
Originally Posted by Mpower View Post
I think the 3.0 petrol AWD is just their image car and they are not interested in volumes. I wonder why they didn't launch their excellent 1.8 FSI turbo4 to go against the C200K.
And what an image at that! But they could have priced it more competitively (local assembly etc. etc.)? What's the point of selling it for about the same money as the stonking BMW 530D?

About the 1.8, beats me too. That would have been the ideal entry-level A4.
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