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Audi Targets Volume Brands as Luxury Demand Slows
Autonews | June 2, 2015


SHANGHAI -- Audi expects to offset softening demand for large luxury cars in China by winning sales from volume brands. Executives at Volkswagen AG's luxury unit say the slowdown in China is leading to lower capacity utilization of its two local plants, rising incentive spending on older models and a shift away from lucrative upper-segment models such as the long-wheelbase A6 sedan. Audi believes it is well placed to gain market share as the brand introduces smaller sedans and crossovers.
 

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I wonder if this is not more of Chinese consumers moving away from overpriced Audi models and less about shifting from luxury models altogether.

Now Audi want's to compete with fast selling Mondeo, Focus and Escort. This can't be good for the Audi image as a luxury brand, to 'need' to directly compete with volume brands.
 

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I wonder if this is not more of Chinese consumers moving away from overpriced Audi models and less about shifting from luxury models altogether.

Now Audi want's to compete with fast selling Mondeo, Focus and Escort. This can't be good for the Audi image as a luxury brand, to 'need' to directly compete with volume brands.
I would rather be a healthy premium brand that expands it's reach into the mainstream than a healthy mainstream brand that has to compete with them. Yes the Mondeo, Focus, and Escort are fast sellers, but a brand like Audi will be able to immediately compete with them unlike a brand like Mazda that builds equally good vehicles, but as a mainstream brand has no leg up. Audi isn't going to go toe to toe with the base Ford models, it's going to occupy the high end and still sell for a premium.

An Audi, BMW, or Mercedes, or all of them that decide to compete in the mainstream market is a huge long term threat to Ford and all other mainstream brands. This is exactly why you see all the mainstream brands adding trim levels that themselves reach up market, they have to move their image up market or in the long haul find their brand devalued by the premium brand onslaught.
 

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I would rather be a healthy premium brand that expands it's reach into the mainstream than a healthy mainstream brand that has to compete with them. Yes the Mondeo, Focus, and Escort are fast sellers, but a brand like Audi will be able to immediately compete with them unlike a brand like Mazda that builds equally good vehicles, but as a mainstream brand has no leg up. Audi isn't going to go toe to toe with the base Ford models, it's going to occupy the high end and still sell for a premium.

An Audi, BMW, or Mercedes, or all of them that decide to compete in the mainstream market is a huge long term threat to Ford and all other mainstream brands. This is exactly why you see all the mainstream brands adding trim levels that themselves reach up market, they have to move their image up market or in the long haul find their brand devalued by the premium brand onslaught.
I see what you mean. Which could also indicate that we should expect to see a trim level above Titanium in the US for Ford brands, to dig deeper into the luxury brands from the bottom up.
 

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I see what you mean. Which could also indicate that we should expect to see a trim level above Titanium in the US for Ford brands, to dig deeper into the luxury brands from the bottom up.
Not at all, they just need Lincoln to take that bite out of the big four. Between the Fusion Titanium and MKZ I would say they have the midsize covered assuming of course they can sell more MKZs. Below that in size, how much could you really add to the Focus Titanium? The A3 isn't exactly a loaded premium car, not any more than a Focus Titanium, it just has the prestige associated with being an Audi.
 

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Not at all, they just need Lincoln to take that bite out of the big four. Between the Fusion Titanium and MKZ I would say they have the midsize covered assuming of course they can sell more MKZs. Below that in size, how much could you really add to the Focus Titanium? The A3 isn't exactly a loaded premium car, not any more than a Focus Titanium, it just has the prestige associated with being an Audi.
I would think that with Ford moving more up market with trim levels, and Lincoln moving more up market toward 'true luxury', that allows for Ford, the volume brand, to push into the current luxury brands while they drop down into volume brand territory. With Lincoln staying on the high end of luxury.

Audi does have it's prestige as a high priced luxury brand, but as they continue to dip further down into the dub $30k market, they will start going head to head with volume brand models that match quality and features at lower price, with the volume brand coming out ahead in some cases. Which will begin to change the perception of the 'luxury' brand.
 

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I would think that with Ford moving more up market with trim levels, and Lincoln moving more up market toward 'true luxury', that allows for Ford, the volume brand, to push into the current luxury brands while they drop down into volume brand territory. With Lincoln staying on the high end of luxury.
I don't think you want the Fusion competing with a high end A4/A6 as that leaves little room for Lincoln. Ford should cover the lesser optioned/priced in it's size while Lincoln takes on the truly premium vehicles/trim levels IMO. Lincoln has a long way to go just to match the big four, it's a bit early to expect them to move beyond that, if ever.

Audi does have it's prestige as a high priced luxury brand, but as they continue to dip further down into the dub $30k market, they will start going head to head with volume brand models that match quality and features at lower price, with the volume brand coming out ahead in some cases. Which will begin to change the perception of the 'luxury' brand.
So long as the A6 and up continue to maintain their level of quality, and design they aren't going to take any hits from the A3. In reality the A3 isn't that much smaller than the A4 used to be, same with the BMW 1 series vs the current 3 series. I just don't see good quality premium smaller vehicles offered by the big 4 as ever lessening the brands image, but it will clearly add to their prospective customer base. How is an S-class/A8 going to be negatively effected by the A3/CLA? Unless the future versions of their larger cars are no longer as good or better than their current versions they'll keep on truckin'!
 

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Now we have the Lincoln MKA coming to address the entry luxury A3.
I *HOPE* not

I spent a good bit of time in the A3 at the last autoshow = LOVE it (almost**)
BUT
it is sooooooooo much what a smallish MERCURY should/could be
that
I can't see it helping Lincoln's perception At All


** no hybrid ... also not a hatch



edit
can we agree not to use that horrible "[email protected]__" identifier? ...at least until we HAFTA??
 

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I wonder if this is not more of Chinese consumers moving away from overpriced Audi models and less about shifting from luxury models altogether.
That was my immediate thought, too. I mean ... if Chinese buyers were moving away from luxury models, wouldn't Lincoln have noticed that? Certainly they did their research....


Cort :) www.oldcarsstronghearts.com
1979 & 1989 Caprice Classics | pigValve, paceMaker, cowValve
"I should've drove all night" __ Bon Jovi __ 'Misunderstood'
 

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Ever seen a base model A3? Audi, BMW & MB already sell tons of budget cars, just not in North America. :smile:
The line between premium and mainstream vehicles is very cloudy, until you hit the high levels like the 7 Series etc etc.
 

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No one is mentioning something very important, SERVICE. Service and maintenance in premium brands is a delight compared with mainstream brands and a lot of people would rather pay a bit more for a car brand that offers great service. Ford(and the others) needs to step up their game in the service department, this is very important.
 

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The problem for Audi & its service in China is that Audi was in cohoots with the dealerships and gouged/overcharged the clients for the privilege of that so called nicer service.
 

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Bloggin said:
I wonder if this is not more of Chinese consumers moving away from overpriced Audi models and less about shifting from luxury models altogether.
That was my immediate thought, too. I mean ... if Chinese buyers were moving away from luxury models, wouldn't Lincoln have noticed that? Certainly they did their research....
WUDDABOUT MumBle & BuMble(w)??
are they down too??

just-imho this might-perhaps be that the ruling gazillionaires have enough vehicles (*for the moment*)
and now the emerging (eww) middle class comprises the majority of buyers?



Ever seen a base model A3? Audi, BMW & MB already sell tons of budget cars, just not in North America. :smile:
The line between premium and mainstream vehicles is very cloudy, until you hit the high levels like the 7 Series etc etc.
:thumb: totally!

The Return (of MERCURY) can be a REVELATION to the world
of just how much (of a bit) Nicer small(ish) cars can be!!!
 

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The problem for Audi & its service in China is that Audi was in cohoots with the dealerships and gouged/overcharged the clients for the privilege of that so called nicer service.
But now with offers like free maintenance and all that, would people care? And long term isn't a thing because these people are leasing the cars so they don't care what long term brings. Btw, I'm referring more to our market than China.
 

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Free maintenance is in the MSRP, but the Audi parts pricing fiasco in China cost VW big time penalties.
 

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WUDDABOUT MumBle & BuMble(w)??
are they down too??

just-imho this might-perhaps be that the ruling gazillionaires have enough vehicles (*for the moment*)
and now the emerging (eww) middle class comprises the majority of buyers?
That seems perhaps about right..........

Shocking we haven't heard about those 2 you mentioned.... irony rocks.


Cort :) www.oldcarsstronghearts.com
1979 & 1989 Caprice Classics | pigValve, paceMaker, cowValve
"Confusing what is real" __ Linkin Park __ 'Crawling'
 

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Discussion Starter #19
That was my immediate thought, too. I mean ... if Chinese buyers were moving away from luxury models, wouldn't Lincoln have noticed that? Certainly they did their research....


Cort :) www.oldcarsstronghearts.com
1979 & 1989 Caprice Classics | pigValve, paceMaker, cowValve
"I should've drove all night" __ Bon Jovi __ 'Misunderstood'
I have not seen anything about BMW or MB talking about slower high end luxury car sales. Cadillac is boasting bought higher sales of their ATS-L which competes with the Audi A6-L. Which makes me think it is Audi that has oversaturated their product line with too many models that look exactly the same, but different sizes. And now it could be that consumers see the less popular top end models as just bigger version of the low end models that are so common.

Then at the same time, with road rage building in China, more luxury buyers out of fear may be looking for SUVs. Which is a good thing, as Lincoln is set to launch the imported Navigator SUV in China later this year, along with the New MKX CUV.
 

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Now we have the Lincoln MKA coming to address the entry luxury A3.
Audi can get away with an A3, Lincoln couldn't. Maybe an A4, and probably only for China. Lincoln attributes don't scale that low and continue to work. Visually and culturally, Lincoln will become awfully similar to Jaguar and Land Rover over the next couple of years, not Mercedes/BMW/Audi. It will remain a low volume luxury brand with emphasis on exclusivity not mass market volume.

I don't expect Lincoln's portfolio to change significantly beyond the elimination of MKT and the addition of a new 3-Row Crossover and brand, and likely a smaller luxury sedan geared toward China based on the next-gen Focus.
 
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