October 31, 2014

Audi have BMW and Mercedes in their sights

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With demand for luxury and high end sports cars increasing Audi are aiming to compete on pricing with BMW and Mercedes with the R8 GT, which will be its most expensive model ever.

The supercar, which costs 193,000 euros in its home market of Germany, is part of a broader expansion of Audi’s model range which may include a third sports car line in addition to the R8 and TT.

The strategy is an important one for Audi because they help the car maker increase the price customers are willing to pay across the entire model range by raising the brand’s overall appeal.

Audi, which lags behind BMW and Mercedes in pricing power, has spent the last decade boosting its offerings.

“The more Audi advances as a premium manufacturer, the less necessary will it be for them to offer lower prices,” said Sascha Heiden, senior analyst at IHS Automotive in Frankfurt.

The average price Audi currently gets for a car in the United States, the largest market for luxury cars, is $43,820, or $12,630 less than Mercedes and $7,829 lower than BMW, according to automotive Web site Edmunds.com.

Stephan Reil, development chief at Audi’s Quattro sports car division said at the carmaker’s headquarters “This car will naturally have a positive impact on the flagship Audi brand,” “We can imagine many options, you’ll have to wait and be surprised,” he said of new models.

Audi CEO Rupert Stadler is adding the R8 GT, which will be limited to 333 cars, four years after the R8 coupe. The new GT version has a more powerful engine, revised aerodynamics and carbon-fibre components that cut 220 pounds off the weight.

Audi, the biggest contributor to VW’s profit, is open to adding a third sports car line positioned between the R8 and TT models, he said in an interview Oct. 14. The TT RS coupe base price is 56,150 euros in Germany, while the R8 coupe starts at 109,100 euros.

Audi has pledged to increase deliveries to 1.5 million vehicles and dethrone BMW as the world’s largest luxury-car maker by 2015. Audi targets record sales of more than 1.08 million vehicles this year.

Source: Automotive News


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