Re: Fact. Rep tells all!

[ScharfR@aol.com]

In a message dated 96-05-03 16:59:02 EDT, eliot@u.washington.edu (Eliot Lim)
writes:

>seeing that a4s are starting to sell really well, that would mean that
>their unit cost will be dropping (because the fixed certification
>costs are divided over each unit sold) which would mean that they can
>price it more competitively without hurting themselves too much.

This would be true if there was any unused/unsold production capacity.  As I
read it in the Greman press, Ingolstadt is operating above its rated capacity
throught the use of overtime.  The unfortunate implication is that no
volume-based price decrease is likely.

It's also worth remembering that the current U.S. volume is still only a tiny
fraction of world wide Audi volume.  Last year AoA sold a bit over 18,000
cars.  Audi's total volume was around 450,000.  So again, even a doubling of
U.S. sales isn't likely to lead to any significant economies of scale.