Audi: Dream Line Up

[RUTLEDGE_R@a1.wdc.com]

Audidom,

There have been recent posts about why Audi doesn't bring more of the neat 
stuff to North America.  

I've only recently subscribed to this daily barrage of Audi emails, but 
I've seen enough to be very impressed at the body of knowledge this group 
has.  With this complement, I want to start a new thread regarding some of 
Audi's constraints and how we can get the neatest possible stuff:

	1. Timing:  I understand the US EPA/DOT require testing
		    prior to importing cars.  This must lead
		    to timing windows that Audi must hit with
		    the proper configurations, else they miss
		    the model years.  For instance, does it make
		    sense to produce the 12V 2.8 in the A4 for
		    November-January, then drop in the 30V 2.8
	            for the balance of the model year??

	2. Supply:  If Audi opened up all markets (i.e. Germany,
	  	    UK, North America, etc) to the 30V 2.8, could
		    they build this many heads?  They obviously have
		    manufacturing tooling to build the 12V 2.8 and
		    different tooling to build the 30V 2.8.  If they
		    don't have enough to build 100% of the volume
		    as 30V, then they have to build some 12V and
		    then allocate where it goes.  Unfortunately it
		    looks like the US is down at the bottom of the
		    list.  Now Audi US can't out muscle Audi Europe,
		    thus Audi Europe gets the cool stuff first.
	 	    Think of it this way.....if Audi is selling every
		    car they make.....why waste the time and effort
		    to create more models for North America?
		    I challenge you to find out what Audi is capable
		    of producing at their various plants (engines, heads,
		    assembly, etc).


	3. Platforms:  This is the key to modern manufacturing.
		       I know that VW/Audi (Piech) now subscribes
		       to this philosophy.  The idea is not to
		       build 10K different configurations (SKUs)
		       using 100M different parts.  The concept
		       is to have common parts amongst the models.
		       This reduces design, parts, and manufacturing
		       cost.  This is why the new A4 chassis is being
		       used with minor mods for the new VW Passat
		       and the new A6.  As an example, Toyota
		       is only building the new Camry in the 4 door
		       style...no 2 door coupe...no station wagon.
		       They probably did this because >95% of the
		       demand was for the 4 door....thus they couldn't
		       financially justify the development/manufacturing
		       expense of the low volume models.  This is a
		       good business practice.

So, chances are the future will hold fewer configurations (chassis, engine, 
transmission, suspension).  Audi must build to the target market they are 
going after.  What would you all define as the Audi target market?  I think 
of the following for other automakers:

	GM: The features the average guy wants at a low price.
	Ford: Better design, quality, features than GM, higher price.
	Honda: Efficiency, reliability, quality.
 	Toyota: The features the average guy wants, but with reliablity
		and quality at a higher price.
	Mercedes: Awesome quality for those with high disposable income.
	BMW: A performance/sporty Mercedes
	Volvo: Safe, long-lasting sedans/wagons.

If you follow this drift.....where does Audi position themselves relative 
to Lexus (Toyota), Acura (Honda), Infiniti (Nissan), Mercedes, BMW, Volvo, 
Saab and the other autos in the price range they target?  I think a clue is 
to compare Audi with Suburu....as I understand Suburu will sell >200K cars 
in the US in 1997 (true?/false?). 

The only way out of this I see is for Audi to start a more active parts 
program, ala Mopar, that allows the Audi fanatics (i.e. the Quattro list) 
to buy the fun toys (valves, turbos, suspension, brakes) to fix up their 
cars.  I don't know how the EPA will like this!  Is this possible?  This 
way Audi offers 2-3 trim levels for each platform, and the fanatics can buy 
$5-10K worth of parts to trim out the car to their preference.  If this 
stuff needs certification, maybe they spend the $$$ to certify the parts 
with the EPA, but not build the models.  Dealers make more money turning 
their inventory...not sitting on 10K different configurations.  Let the 
Dealers make money selling 2-3 trim levels and then $5-$10K in parts/labor.
Could this happen?

If we all really like Audi, lets help them sell more cars and make more 
money in North America.  If we become a bigger percentage of their 
worldwide volumes, we will speak with a larger voice when it comes to their 
plans.

I think they need to have the right product at the right time at the right 
price for the right people.  Audi's thinking relative to the A4 2.8 and the 
A4 1.8T is right on, i.e. where they priced it.  AoA needs to lobby harder 
for America getting the neat 30V 2.8....and should get the support given 
their awesome sales growth in 1996.

I think there were 15M cars/trucks sold in North America in 1996.  1% 
markeshare would be 150K.  If Audi sold 20K cars, this is slighly above 
0.1% marketshare.

So, I challenge you all:

   "How does Audi profitably sell 150K cars in America"

This might be too ambitous, thus perhaps lets target 50K.


Cheers,

Rich Rutledge
86 CGT - Commemorative Series - owned since new. 

I work at Western Digital.  We make 20M Hard Disk Drives annually.