New A4 Attraction for "cheap"

[Rm2s]

Told by my friend PA clearing 10 units of new A4 1.8T Attraction for 125K last weekend. All sold out I was told.

 

For OMV around 35K, that is the right price for the car.

 

Also last few units of A6 2.0T is going at 145K (OMV around 44K). Now that's value. But, facelift coming, so, they have to clear stock.

Edited October 1, 2008 by Rm2s

[Xspace]

Sold out liao tell us also bo use liao...

[Rm2s]

If someone is looking to buy an Audi the information will help during negotiation

[Sdf5725]

in fact, the sales did call few days ago to potential buyers on this promotion.

[Kangz]

Do you happen to know why are they selling the new A4 at a discount? For the A6 I can understand..but the A4

[Damienic]

PA finally realised they are selling their car at too high a premium and pricing themselves out of the mkt...want to bring down the price immediately by a significant amt without a valid excuse will make them lose face...so best thing to do is to tell the people its some kind of promo for limited units..then slowly adjust their price to be inline with that sort of "promotional" level in near future...

 

Audi's mkt share in SG can be much much higher than current actually..its becos of the AD wanting too much to target the more "atas" mkt segment which is why their sales have been pretty limited...they are doing fine but there is no reason why they cannot overtake the likes of Volvo and VW with their offering..

Edited October 2, 2008 by Damienic

[Soya]

"...they are doing fine but there is no reason why they cannot overtake the likes of Volvo and VW with their offering.."

Got reason. Ppl buy certain conti brands for their real or perceived values. Merc = top of the league. BMW = can mention in the same breath as Merc. Volvo = safe. VW = supposedly europe's affordable 'proton'. But Audi = neither really top league, neither famed for safety, neither really affordable, neither here nor there. Maybe just different. But u can get 'different' wif a significantly cheaper Skoda.

[Kangz]

Yes i agree that the mark up for Audi is bordering on the ridiculous. 33k OMV for Attraction spec going for 139k and 37-39k OMV for Ambition going for 149k if i am not mistaken, a C180 with a OMV of 37k is going for around 136k...making the pricing strategy of PA way off the mark.

 

Targeting the atas mkt is not wrong lah, but with their current pricing they are targeting beyond the atas mkt (if you take Merc as a benchmark for atas). If they minus 10k off the price of every single A4 model, they will have a competitive product in their hands.

[Kangz]

But honestly bro, the fit and finish + ambience of Audi is top notch. This is their differentiating factor. However, certain cost cutting measures can be seen in the A4, like unlined storage bins and hard plastic for arm rest and interior door panels. a little unacceptable for the price they are asking for the base 1.8T lah...

 

at the end of the day though, i still prefer the logical layout of volvo interiors and those to-die-for seats. imho the germans are behind the swedes when designing car interiors.

[Damienic]

Yes, you are right...however, Audi has been rolling out pretty exciting offerings in recent times which has captured quite a lot of interest..perceived image of the brand has improved for the last few yrs compared to the 90's where the two main luxurious brand is still Mercs and BMW...this is where the problem comes in...The A4's main rivals is the 320 and C180....PML is selling the 320 consistently at 13-20K lower than the A4 after overtrade discount be it the previous A4 or the new A4(exclude the time when PA is clearing stocks)..many interested buyers of A4 who are concerned abt whether they are getting their money's worth does lose interest after finding out that the 320 is so much cheaper than the A4 and with a higher OMV somemore! C180 is selling at a high price but is a different proposition as Mercs is still regarded as a different class in SG with best resale value in the market for luxury conti and it has quite a few other models churning out exciting sales numbers as well..

 

I know of many pple who are interested in an Audi but is often put off by the asking price such that they turn their attention to a BMW instead...Iam not expecting Audi sales to be as good as Mercs or BMW if they reduce their price nor expect them to sell as low as the 320 does..but with the kind of interest it has been generating in the last couple of yrs esp its new A4, they certainly can give BMW a run for their money but not at the price level they have been selling along (before this "promotion)...I see Audi as a top 10 seller in SG, not as high as BMW or Mercs, but certainly higher than the likes of Volvo...Volvo = safe but Audi = perceived German superior build quality + a head turner...Volvo is a somewhere in between brand as well...not as prestigious as BMW or Mercs but it garners enuf sales volume to be ahead of Audi becos for the kind of OMV of their cars, they are selling at a more reasonable level than the Audi AD does...if PA can maintain price of 125K for the long term, it is only a matter of time before it overtakes Volvo in SG...

Edited October 2, 2008 by Damienic

[Damienic]

Exactly. Mercs can afford to target atas mkt whereas Audi is still not up there yet in terms of perceived brand image than Mercs and yet it is selling with a margin which is probably as high as Mercs does or even higher...how to convince more people to switch to an Audi then?

[Rm2s]

Do you happen to know why are they selling the new A4 at a discount? For the A6 I can understand..but the A4

 

My reading of the situation is that since last weekend is end of Sept, they might be chasing quarterly target.

 

Bear in mind that even when they are selling it at 125K, with OMV of 35K and assumed COE of 14K, they are still making gross 30K per car.

[Damienic]

30K still a little bit high, but acceptable imo for such a car...mark up around 90% of OMV which I think is quite a normal mkt practice in SG if you have a good product offering..the new A4 excites lots of pple...if they continue this margin level for long term, think their sales voulme can increase substantially...maybe additional 200 units or so a yr..

 

Some people may say for them working on higher margin and lower volume compared to lower margin and higher volume might work out to be almost similar....however, for long term, it is better to work towards achieving greater market share...with greater market share will help to indirectly boost resale value and this indirectly will help to create better demand and also better brand image...when the market perception is tat the brand is "up there", people will be willing to pay a little more if by then they start to slap a slightly higher margin..

[Rm2s]

Without looking at the price, comparing 320 to A4 1.8T, the A4 has a nicer overall package. The interior is nice and the exterior works well. The only let down is perhaps the CVT gearbox. 320 probably wins in terms of ride and handling but the equipment level is just sparse.

 

So for 30K margin at 125K asking, I think they can move the car, just hope that they will make this price drop permanent. Bad news for existing owners (for only 3 months, price dropped by 14K).

[Mojoe]

For OMV of 35k, I think 125k is still high though. The MY08 159 is apparently 33k OMV and selling for a good 10k less than the Audi

 

Even the Saab 9-3 is less... OMV about 32k, selling 118k...

[Rm2s]

The 159 is a very good package also, when I was looking for a car, the selespeed just not something I like. For Saab, no comment.

[Damienic]

yes, doing such comparision will no doubt make the A4 still look steep at 125K...but I think marketing and pricing strategies are issues to be considered from the perspective of AD...the 159 and 93 are two very much unappreciated makes in SG...its not tat they are no good, in fact, the 159 with the current Q2 system can be a very strong rival to the other similar luxury makes..but its human mentality to be less willing to pay for a product that does not command a strong following..Audi is different..although it does not command a following as strong as Mercs/BMW, it is by and large very well-accepted by large section of the population..much more so than the likes of 93 and 159...As an AD, they won't price their product so close to the other much less popular model such as 159 and 93,knowing well they can command a higher margin...but at same time they shouldn't price their product at too high a premium which can be a turn off too..so, 125K is something in between...several K higher in margin for an unit compared to the other less heralded rivals, but at same time not too far out of reach in comparision to these makes as well..

[Damienic]

For A4 to sell just several K higher than the basic 320 is still justifiable to certain extent as it has better build quality and is German made (whereas 320 is SA made)...it is quite a head turner in the looks dept too...I believe there would still be a considerable number of pple who would consider the A4 ahead of the 320 even though the latter is cheaper..but if it is like a whopping 20K pricier, would be really difficult to convince a considerable section of buyer to ditch the 320 in favour of the A4...

Edited October 2, 2008 by Damienic