How will economy impact A8 sales?
 

How bad will this be for Audi and how good for buyers?

There will be incentives, as there are now but they don’t make many, don’t sell much and not not many are out there

There also won’t be any more made this year or even possibly next

It's 20K off of a 2019 A8L right now, but I don't think the present situation will impact many A8 buyers. At this income level and given how low the #s were anyways for vehicles in this class on an annual sales perspective, I don't imagine much impact - much like how homes in the 7 figure range aren't really that impacted right now.

Went to a local dealership in Houston and sat in a 90k 2019 A8 on the showroom. Got an offer for 30% off MSRP 10 mins later without negotiating. Showed the quote to a dealership in Palo Alto and got 32% off. At this point I'm just going to wait until December and hopefully get 40% off MSRP. Tack a 10 years/ 100k miles warranty for 4.5k and I got my daily driver for the next 10 years. Hopefully Audi has the best reliability out of the 3 Germans. DO NOT accept any less than 30% off MSRP, they are desperate as no one is buying the A8.

You probably went to the dealer that I got mine from. They dropped the prices dramatically on the remaining 2019 A8’s a couple weeks ago. When they dropped the prices that had 7 in inventory. 2 1/2 weeks later they are all gone.

Audi North Houston

Audi Central Houston - evidently they all were dropping prices.

I leased my 2019 just before the pandemic early January. $28K off

The flaw in your strategy is that there won't be any 2019s left by December. The incentive for Audi is to get rid of all the leftover V6s 2019 that carried into 2020

I got my 2019 with a V8 in December for 24% off at Audi Central, which I thought was insane because the V8’s were so rare at that point. Heck, the sales guys at Audi West Houston and Central didn’t even know they existed and the sales manager at Audi West said Central quoted me a wrong price and that “deals” weren’t happening on V8’s. I got my $113k car for just under $86k.

Then for a couple months after Christmas, prices seemed to be up on the 2019’s, and now they’re trying to clear them all out. Audi West and Central (both are Sonic owned dealers) had about 30 2019’s a month ago when they started the aggressive deals, and they barely have any 2019’s left now.

Now I want a ‘20 with predictive active suspension hahahha

They did clear them out. Audi Central said they sold 1-2 per month normally. With the greatly reduced prices starting the end of April they sold the seven 2019’s they had remaining in less than three weeks. The 0% financing and favorable leasing options also helped move them quickly.

Maybe so, my lease ends in December so I have no choice. I have about 45 2019s with the options I want bookmarked on Cargurus so hopefully that will give me some cushion.

No dealer is going to let a car (2019) sit on his lot for a year. The carrying costs would kill them. Why not identify a car at a few dealerships, tell them you are ready to buy but you have 6 months of payments left and let them figure out a way to minimize you costs and get you into a new car.

As a professional negotiator for 35 years I would always make it the other guys problem and force him to come up with a creative solution and "thrill me" rather than me figure it out. They have all kinds of hidden incentives, contributions, margins or even begging Audi regional to find creative ways to solve your problem

once the car is on the lot for 10 months or so there really are no carrying costs beyond insurance. It’s already been paid for. Cars can be on a lot for longer than that - happens all the time

there are no hidden incentives or margins or anything else right now. There are no monthly “bonuses” or quarterly sales goals. Nada

https://www.cargurus.com/Cars/new/se...ting=223507950

I can show you 10 more examples. This particular one is 500+ days and I just got a quote from them for 26% off which is pitiful.

26% is pitiful?

do you discount your goods and services by 26% routinely?

There is a limit a dealer can do, that makes sense. They don’t “need” to sell it either. They can simply make it a loaner. Many seek to think there is a point of desperation on a new car, and I can assure you, that’s not the case when it boils down to it (A8 or anything else).

Deals can always be done by 2 realistic parties

You do you, I'll do me. No more talk, will update in December.

What a ****ty attitude, when people are trying to help you.

Not many people do this style of buying in the UK anymore. The dealers won't give you anything written to just move onto another dealer with that quote. They also won't give you their best price unless you are going to buy at that stage. All the dealers are wise to it.

What most people do, is carry out extensive research on what you think you can get a car for. Many UK online brokers will help with that research.

Armed with all of that, I then go down to the dealer of my choice and talk to a sales person. No advanced phone calls, just appear at the dealer.

Then, I sit down with a pen in one hand and a credit card in another. I tell what I want and what I want to pay for it. I also tell them they will 100% get a signature and a deposit if they beat that price. The sales people love it. You are an unexpected sale to be had and they know exactly what they need to do to get that sale. No phone calls, no constant battle over price, straight talking and you were not even on their prospect list.. It has never failed.

"I don't think the present situation will impact many A8 buyers. At this income level and given how low the #s were anyways for vehicles in this class on an annual sales perspective, I don't imagine much impact"

I'm sorry, but I could not disagree more. I think MANY would-be A8 buyers are impacted by the COVID economy and I think luxury brands will be crushed just like everyone else. Given the level of uncertainty right now, With a few exceptions on the margins, I just don't see people running out to pluck down $85 to $100k on an automobile right now. Corporate execs are taking pay cuts; doctors in private practice are making less; lawyers are making less; bonuses/partner distributions/stock awards will be cut or deferred; highly compensated sales professionals who eat what they kill are making significantly less. I could go on. Suffice to say there will be deep discounting for the remainder of the year for sure - especially near year end.

No need to apologize. My statement is not based on gut feel but pure 'facts' based on studies such as the below. There was a very 'good' study with good visuals done that I am struggling to find. IIRC those who made >$150K/year had <5% "decrease" wrt hours worked or income changes. (I believe this study was in Canada).

https://www.mckinsey.com/industries/...-on-us-workers

That is the basis for my belief, but that's all it is, an educated belief based on article after article saying the same thing. Once in the six figure income range, the effect is a lot less pronounced, if any, than those at the other end of the spectrum. It also makes sense to me. White collar workers can work remotely and continue getting paid what they/we are paid, while those in the food service industry, construction industry, etc, are more likely to be affected, and substantially at that.

I have not seen any studies wrt discretionary budget choice changes for those in the top 5% of income or to see how behaviour has changed but just wanted to share my belief based on the studies similar to the one above.

I could very well be wrong.

Edited to add: I can't find the article to save my life. I tried, sorry.

Yep, good points for sure. If you're on a salary and can work from home you aren't impacted the same way as someone in retail, food and beverage, hourly, etc. I totally get that. The main point I was trying to make is that even in the upper income group (top 10 percent income bracket in the USA is anything over approx. $120k) people are proceeding with caution.

Your constructive dissension versus my opinion had me really really interested to what the target market is for the D5. I was trying to figure out the demographic that Audi specifically targets with the D5 and only came across a post from someone on here in the D3 (or D2?) board alleging the median income of the D5 buyer is $300K.

While this may be in fact the case, I wanted to read what Audi specifically targets themselves, and was surprised to find, on slide 10/50 in the attached, HH median income of all Audi customers are $193K (back in 2013!) and are substantially higher than those of BMW/Audi. So if that's the case for HH income of all Audi customers, then perhaps there is some truth to the $300K number.

Nothing based on scientific studies of course, but as a result, I think it lends a bit more credence to my opinion that perhaps the D5 won't be as affected because of this pandemic. I can absolutely see why someone making $120K who may have wanted to splurge for a D5 may hold off, but someone making >$300K would probably not be affected (or at least, as much).

Anyway, just a guessing game (and an exercise in critical thinking which is always fun!)

Edited to add: That last slide.... ;) (slide 50).

I was looking at one A8L dropped to $72K CAD and sold :( Two others with backseat kit SOLD!. So that is 3. There is one for sale in North Vanc for $88K CAD. Oh man,

Having said that I think we are going to for one of the surplus E-Trons. My wife wants electric so she can stop smelling fumes and charge at home etc. Being a PE EE I have to agree :)

Please keep in mind Audi Canada is giving 20k off of 2019 A8s so dealer margins are still 7 percent in Canada

My dealer just sent an offer of $25k USD off an A8L with 0% financing for 66 months!
Granted they only have $94k optioned A8L's, but still sorta makes up for the deprecation losses.

There has always been negotiating room and discounting available for A8s depending on the time of the year. I talked down mine from an MSRP of $102,500 (US) to $81K, before convincing the dealer to throw in Audi Care for 4 years as well as lease return insurance, at no additional cost. That was in September of 2017.