thinkpad

When I bought the new A4 in 2002 the economy was in a sad state (dot bomb). I walked into a dealership, offered them 2% over invoice, .9% financing (promotion was 2.9%), told them to remove any marketing charges (when asked why on this one I said what's next, you charge me for office supplies??), I then told them I have to get back to the office and will leave in 30 mins. Sales Manager went to the head sales guy. 5 minutes later he comes back and said we had a deal. I signed everything and told them to have the car parked out front, washed, gassed and ready to go. Walking in the door to driving off the lot, less than 30 mins.

This time around the economy is a thousand times worse. Wonder what kind of deal I can get now. Probably below invoice because Audi is going to be forced to offer stealerships discounts/bonus's, etc. Audi is in a bind because they built so many of these A4's not realizing the USA economy was going to take a massive hit.

What are you people paying? Word to the wise. If you are about to buy any new car remember this, you are in the drivers seat in this economy. Walk out and make the offer at a different stealership. You are buying a car, not making friends. And if you are rich as hell and don't care about the money, do us all a favor and don't just pay what they ask, and here's why, when you leave, the sales guy will tell all his co workers how he worked you over to pay so much more.

Still curious what people are paying? What is the stealership saying/reacting/etc?

SFV A4

The difference with today and 2002 is Audi is far more ontop of their financial game. And it's not just them, every car maker is finding ways to make more money and lose less. Whether it's leases, rebates, incentives, trimming workforces, production, options, or whatever, car makers are learning more and more how to make more money on each sale. It's modern times and business smarts that has hit the car world. Back in 2003, I got a raging lease deal on an A4. Times are different now, as they are for most savvy businesses.
Another point, many people do not live in a big city where they can chose to peg multiple dealers against each other in a sale. Some people have less choice in shopping around and getting that special bargain deal.
For those who do live in large urban areas with mutliple dealerships, there is no excuse. Buying a new model when it first comes out will never yield a good buy or value. It's always been this way and always will be due to supply and demand factors. There is nothing wrong with someone who wants the new design now and to be the first on the streets. If paying top dollar was such the issue, they'd simple not be buying.

thinkpad

I completely agree with what you say however in a down economy supply is assumed to be higher than demand. As it stands now people in the automotive industry are losing jobs and will continue for some time. This x-mas holiday will be the worst retail environment in 15 years and likely will end up getting the record for the last 50 years, WalMart excluded (by the way as we know, WalMart will prosper hugely in this environment, buy their stock to hedge your Audi!).

The car manufacturers have done everything to increase profits but the one thing they have no control over is the state of the economy. Audi made a huge mistake by not building a factory here in the USA while the foreign exchange rate was so good because then they could have built Audi's for nothing but instead they are building them mostly in Germany paying Euros then shipping the car to the USA and getting even less money back when they repatriate the money to Germany. (BTW, Audi did build a factory in China, probably a good move but car sales are down something like 30% in China in the last month but they can ride that problem out longer given they are making them for nothing). Audi can respond to the economy by lowering their prices, doing special promos for dealerships, etc, etc. They don't have the luxury of riding this out because the entire world is going into a recessionary mode. The housing/financial stability problem isn't just an USA problem, it is world wide.

I believe come mid January we will hear new pricing come out of Audi. Audi can do this too because as I understand it they own all of their financing arms and don't rely on financial institutions that have little ability to loan cash. You are spot on that the first cars are bought on emotion so people will pay to have it first and will throw finance out the window. Supply constraints though aren't the reason for paying higher prices although a salesman will tell you all day they are limited. A manufacturing plant and more so one that has been retooled to make the new A4's has to produce at full bore right out of the gate or else costs spiral out of control. If they are not doing that we would have heard of a layoff at Audi Germany (I'll look it up but I don't believe there has been one of large scale). There are more Audi's sitting in Germany and on the docks of ports around the USA than Audi will ever admit. At this point they are hoping and praying people come flooding through the doors but in reality they are in all likelihood figuring out new pricing. They are a smart organization for sure. Audi releases car sales numbers in north america, keep an eye on those, if they decline month over month starting in September, then you will know for sure come January (my prediction) they will lower prices. Lowering prices can come in the form of throwing in free options, that helps them move specific inventory that is backing up.

SFV A4

What will be the sign of Audi giving in to slow sales will be when they start offering bargain leases and APR's again. This traditionally happens after a new model settles down, during the winter, and during hard economic times. If a car maker struggles, the deals emerge- plain and simple. From all I have read and researched in the last 15 years, Audi was not hurting up until very recently when the US economy/dollar took a dump.

ACSGP

Always a gamble (although less so now), just like FX rates.

JerryS4

Sure, car sales seem slow due to the gas price issue but come on. Put down the Latte' with the double shot of espresso and relax a bit. You seem tense. In and out in 30 minutes with a car. Those guys at the car dealer must still have their heads spinning.

The new A4's just got to the dealers three weeks ago and you actually think you can get anyone to sell it to you under cost? Let me guess, you use hypnosis? Is this David Blaine?? ......It is, isn't it?
Do you also drive an Audi like me? ....That is Cool!<ul><li><a href="http://www.youtube.com/watch?v=AYxu_MQSTTY&amp;feature=related">http://www.youtube.com/watch?v=AYxu_MQSTTY&amp;feature=related</a></li></ul>

AofC_RR

Sociologically speaking people will pay for what they want. Sure a dealer may discount the car but don't expect any special promotions. Current lease and interest rates run into November. The nice thing is Audi builds their cars in runs so oversupply is not an issue. They did the same thing with the Q7. They noticed sales slumped and gas prices spiked, they stopped sending over stock units. From what my ASM tells me sales are fine on the new A4. Other than a good lease I wouldn't expect much till model year close out.
Oh and when you bought your 2002 wasn't that the model year change over? I'm willing to bet it was.

Jack Foulard

Audi might do what BMW did-send inventory to other countries than US since they'll make more there.

JoeO

and concentrate more on China.

Personally, that's what I would do if I were them. The USA share of their global market isn't what many think it's cracked up to be.

1990V85speed

For those of you that have been around a long enough and remember the "60 Minutes" fiasco and the outcome of that: AoA's sales went down to around 12K for the year 1991 and they were very close to pulling out of the US market.

Luckily, they didn't. Then hung tough, gave away free maintenance on their cars, as well as some great deals and made it through tough times.

So, here we are again, but with different problems, some of which were written about in the above comments, and different solutions that will get AoA through these times.

As an example of how AoA operates, look at A6 sales for the entire 2008. They declined all year as AoA cut lease deals and money to the dealers. When AoA needed to sell more, they started giving great deals on A6's and the number sold went up.

As was mentioned above, Audi is very good at phasing out an old models as well. As a new model is coming to market they add features to the models, like making all 2008 A4's S Lines and not charge for them. They cut back on the dealer's allotments in a very calculated way and if necessary, give great deals to flush out the balance of the inventory.

As we move ahead into 2009, AoA will determine what they need to do to "move metal" here in the US. It might be that they will need to take less money on their cars for awhile until the economy straitens out. They will do what they need to do to stay in business as we have seen in the past.

Where are car prices going to be in January? Probably lower, but I can't say for sure. If I could "time-the-market," I wouldn't be here writing this email, I'd be in Germany, on "The Ring" driving my R8! ;-)

Time will tell. . .