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Audi are definitely losing money on Canadian sales, no matter what sort of exchange rate hedging they do. A CAD72,840 build (€50,500) is CAD101,000 (€70,000) in Germany on a like for like basis. Without tax.
I know such things are relative, as you are paid in Canadian dollars, and not Euros. But the bean counters in Germany will be cringing every time a Canadian S4 order comes in, LOL!
Cost in my market, a train ride from Ingolstadt, is exactly double yours
Those wheels in the Technik pack are S-Design, not Cavo. The Cavo wheels are used on the S5.
Yeah, cars are definitely much cheaper here in North America compared to Germany or any Euro country. But, we don't have that much choice in customising our cars like you do over there. A lot of options are a-la-carte and not bundled together. In some instances, you get more color choices and optional goodies that we don't get here. The way I see it, if the production process is much simplified, costs come down a lot.
Do German car prices include sales taxes and other costs? Is it On-the-Road price like in the UK? That might be another explanation why car prices are much higher over there.
Follow-up:
I just re-read your post and you did mention no taxes on the German price you quoted. 20k Euro difference between Canadian and German MSRP! On top of that, German cars sold to North America have to board a boat to get here.
Audi are definitely losing money on Canadian sales, no matter what sort of exchange rate hedging they do. A CAD72,840 build (€50,500) is CAD101,000 (€70,000) in Germany on a like for like basis. Without tax.
I know such things are relative, as you are paid in Canadian dollars, and not Euros. But the bean counters in Germany will be cringing every time a Canadian S4 order comes in, LOL!
Cost in my market, a train ride from Ingolstadt, is exactly double yours
Those wheels in the Technik pack are S-Design, not Cavo. The Cavo wheels are used on the S5.
I know, it sounds crazy how much of a difference there is with the cost of a Canadian S4 compared to a European one. Might be because they're trying to be very competitive in the Canadian market? But then again it might be because of countries' fees, taxes, etc, on cars?
Audi are definitely losing money on Canadian sales, no matter what sort of exchange rate hedging they do. A CAD72,840 build (€50,500) is CAD101,000 (€70,000) in Germany on a like for like basis. Without tax.
I know such things are relative, as you are paid in Canadian dollars, and not Euros. But the bean counters in Germany will be cringing every time a Canadian S4 order comes in, LOL!
Cost in my market, a train ride from Ingolstadt, is exactly double yours
Those wheels in the Technik pack are S-Design, not Cavo. The Cavo wheels are used on the S5.
German prices include 19% VAT for one, here in North America, we have to pay sales tax on top of the price. That's another almost 10% where I live, but yes, car prices are still cheaper here even after factoring in tax. It's always been like that. North America is a big market, so they somewhat make it up in volume, too.
German prices include 19% VAT for one, here in North America, we have to pay sales tax on top of the price. That's another almost 10% where I live, but yes, car prices are still cheaper here even after factoring in tax. It's always been like that. North America is a big market, so they somewhat make it up in volume, too.
I think a major factor in the lower North American price is how options are bundled together to simplify the production process. I can imagine how costly it would be if a large portion of the options can be ordered a-la-carte such that your car is more customised. There's just lots of variations.
Here are some 2015 sales figures that I found on the web:
EU 2015 Audi Sales: 763,308
GER 2015 Audi Sales: 269.047
US/CANADA 2015 Audi Sales: 228,956
Looking at the numbers, US/Canada overall sales does not even meet the German sales figures. However, you are right concerning the large volume. Plus, with the simplified production process (lots of options bundled together and removing some features - under seat cubby, for example.), the car prices can be brought down to be competitive here.
I think a major factor in the lower North American price is how options are bundled together to simplify the production process. I can imagine how costly it would be if a large portion of the options can be ordered a-la-carte such that your car is more customised. There's just lots of variations.
Here are some 2015 sales figures that I found on the web:
EU 2015 Audi Sales: 763,308
GER 2015 Audi Sales: 269.047
US/CANADA 2015 Audi Sales: 228,956
Looking at the numbers, US/Canada overall sales does not even meet the German sales figures. However, you are right concerning the large volume. Plus, with the simplified production process (lots of options bundled together and removing some features - under seat cubby, for example.), the car prices can be brought down to be competitive here.
Honestly, I don't think the option bundling makes any difference. The NA spec cars are built on the same assembly lines and there are stats floating around about how often the exact same configured car comes by. It's amazingly infrequent, so the factory lines are completely optimized for every car configuration being different.
No, the prices I quoted excluded tax. Audi are taking a bath on margin in NA, especially Canada with the FX rates.
Not sure where you got those figures from Plat, although directionally you are correct. Germany volumes much higher than the US. China is by far Audi's biggest market. Audi is market leader amongst the big 3 in both China and Germany. Mercedes breathing down their neck, BMW trails. Global they are similar, but BMW relies on its US volumes. Interesting, because it means BMW margins aren't so healthy, then add in their financing activities to prop up lease residuals. Explains the relative lack of development for BMW vs the others. But China growth is erratic, and Europe is looking very fragile.
But Audi are trying to reduce costs, hence Mexican plant for Q5 (NA market will take much of that plant's initial capacity, I think.), and they are using their Belgian facilities for e-tron development and production. The German workers at Ingolstadt and Neckarsulm are getting nervous.
The Cumulative figures below are for the first 7 months of 2016:
Audi Sales by Market July/JulyYTD 2016<br/>Source: VAG Investor Centre. Ingolstadt, 2016-08-11
It's probably safe to assume that Audi doesn't sell their mainstream models at a loss. That wouldn't be a good business model. I wouldn't be surprised if they don't make much money on RS models or even lose money, but use it as a marketing tool to drive people into the showrooms. I've always suspected that one reason RS models are limited production over her is to contain the loses. It would be interesting to compare dealer invoice prices and not MSRP. I suspect the higher labor costs in Europe bring higher dealer margins with them.
10-20-2016, 04:09 PM
B9 S4 Configurator is already up and running in the Audi Canada website
