No doubt that Audi started the year off with a bang. Audi with VW, Mercedes, and BMW have all been pushing diesel-powered cars lately, and even Porsche has joined in the party. But the Audi A3 has been a “slow seller” for Audi in America. It sells massively in Europe where petrol prices are sky-high but Audi has likely been looking for new ways to move the car on this side of the pond. That said, the A3 diesel seems like a good option – it’s relatively spacious and gets real-world gas mileage every bit as good as a Prius.
Observers were no doubt surprised to see Audi spending serious buck at the Super Bowl to promote the clean diesel technology. Indeed, Audi’s humorous “green police” commercial was well composed and sent the message that diesel is the new hybrid. Indeed, it is still cheaper technology as well. (more…)
Toyota Prius one of many Toyota/Lexus models being recalled.
Companies hate recalls. Even recalls that go well, such as the Tylenol recall of the early 1980s, still cost money in inventory, distribution, PR, and of course legal costs. While the Tylenol recall was handled simply by letting consumers know that they should throw away their bottles of aspirin, Toyota’s recent recall of vehicles first in America, then in Europe, cannot simply be handled through a press release.
Instead, Toyota actually has a greater battle. First, engineers must diagnose the problem with their cars, first said to be poorly designed carpets, and now a problem with the electronic throttle control. The truth may be that the company does not fully understand the source of the problem as the LA Time’s recently wrote in interviewing California Congressman Henry Waxman.
Toyota has contended that a slight modification to the accelerator design, including adding a small metal plate to the mechanical sensor in the accelerator should fix the problem. The automaker advises consumers to get the problem fixed, to hold down the start-stop button for three seconds and/or shift the car into neutral. So critical and misunderstood, however, is the procedure to cut power to the car during operation that the company is considering redesigning the start-stop button. The LA Times, who has been covering the Toyota recall extensively (Toyota USA is based in Torrance, California), reports that the company may be changing the button to turn the car off with three-taps of the button in future models. Of course, you might argue, why bother with this potentially costly change, and the response would be to put yourself in the shoes of someone who is driving in a car that has accelerated out of control. Do you really want to wait three seconds to turn off the engine? Certainly not. (more…)
In the last article published by BTKM, we discussed the phenomenon that is the “halo effect” of the automotive sector. The premise is that by creating an “amazing” and “expensive” car, you attract buyers to the brand, who then buy more moderately priced cars (and in great quantities!).
By the way, from Audi:
Audi announces U.S. 2010 model-year prices for its Audi R8 sports cars, including the V10-powered R8 5.2 FSI quattro
- Base MSRP on the all-new Audi R8 V10 model starts at $146,000
- Strong interest in the Audi R8 5.2 FSI quattro drives early shipment to certified Audi R8 dealerships this week
- MSRP on the V8-powered Audi R8 4.2 FSI quattro models remain unchanged from 2009 model-year pricing
HERNDON, Va., Jul 23, 2009 - Audi today announced that the U.S. manufacturer’s suggested retail price for the highly anticipated 2010 Audi R8 5.2 FSI quattro V10 sports car will start at $146,000, with shipments to authorized Audi R8 dealerships across the country beginning this week.
Audi said the MSRP for the 2010 Audi R8 4.2 FSI quattro will start at $114,200, unchanged from the base prices for 2009 models:
R8 5.2 FSI quattro coupe (manual) $146,000
R8 5.2 FSI quattro coupe (R tronic) $155,100
2010 R8 4.2 FSI® quattro® (V8) pricing (excluding $1,200 destination charge, taxes, title, options and dealer charges):
R8 4.2 FSI quattro coupe (manual) $114,200
R8 4.2 FSI quattro coupe (R tronic) $123,300
Designing a car to be priced higher than its German rivals was an exercise in brand positioning, says De Nysschen. “We think we found a sweet spot in the market.” Bentley–which, like Audi, is part of the Volkswagen Group–successfully exploited a similar luxury-market niche when it positioned itself between supercostly Rolls-Royce and the sedans and coupes of BMW and Mercedes.
If there was ever a doubt in the halo effect that accompanies a super car launch… if you ever thought Porsche’s Carrera GT, Lamborghini Reventón, Aston Martin’s One-77, VW’s Phaeton, Mercedes SLR, Acura’s NSX, Nissan’s GT-R, and Audi’s R8 were a waste of space and a money losing venture, you were wrong. VW Group’s crowning achievement is undoubtedly the venerable Bugatti Veyron 16.4.
Acquired in 1998 from Italian entrepreneur Romano Artioli, VW immediately set to work building a successor to the EB110. It was considered by many to be the most sophisticated car of its kind at the time, a trait that followed in VW’s iteration called the Veyron 16.4. Even at its introduction and production start in 2005, VW never intended the Veyron to surpass 300 units. Indeed, the company has said that after 300 are produced, the car will be discontinued. Interestingly, this has not resulted in a static design and the company has continued to pump out alterations including “special editions” and a Gran Sport, replete with a removable roof.
It has been said by many that the Bugatti is the ultimate supercar, not just of today, but also of all time. Those who make that argument point to the jaw-dropping 0-60 mph times under 2.5 seconds and a top speed in excess of 400 KM/hour (250+ mph). Others marvel at the 16-cylinder, 4-turbocharger engine or the 10 radiators onboard. Still others marvel that at full speed, the car runs out of full in 12 minutes and the tires burn to a crisp at 15 minutes. All of that in a rather un-dramatic, but stunning fashion.
It is the combination of those factors, the styling, and the EURO1,000,000+ price tag that make the Bugatti the ultimate halo product for VW Group. What is the halo effect, and why is it so important that VW stands to lose millions of euros for each Veyron produced? Halo products in general are the über-expensive, lower volume, highly publicized products that companies produce to create buzz for the company and the other products sold by that company. Even a low volume company like Porsche can benefit from a halo product because these products do so much to bring status and media coverage. A company that produces a rather low quality product can be perceived as one that more generally produces very high-end products. The company may actually lose money selling the halo product, but these halo products are often considered a marketing cost anyway. Ideally, a company would save massive amounts of money on advertising by introducing a product that is constantly covered by the media.
So it is with the Bugatti Veyron. Associating Bugatti with VW Group and providing otherwise sound business strategy has meant that VW has pushed past Toyota (IN A WEAK MARKET!) to become the number one producer of automobiles in not just Europe, but the entire world with 4.4 million units for the year according to IHS Global Insight.
VW in an effort to promote the tons of eco-friendlier cars launched at IAA in Frankfurt in September has decided to pursue eco-sales with a new eco-friendly racing series. The company is starting a single-make racing series where all of the cars run on bio-produced compressed natural gas. The model used in the series is the new Scirocco and should reduce racetrack CO2 output by 80 per cent over today’s racing fuels. The 2.0-liter 4-cylinder cars will have 220 horsepower on tap. Not bad for an alt fuel car!
On other green fronts, VW Group is working with Stanford University in California in a US$5.75 million project to make VW the largest carmaker with R&D in Silicon Valley. Already the two companies have produced autonomous (read self-driving) versions of the VW Passat and now the Audi TT-S. The Audi TT-S will attempt to drive itself up the 14,110-foot Pike’s Peak next year, according Wired.
Audi’s Johan de Nysschen, critical of the Chevy Volt, took an interview with Time recently to express his views on the state of the luxury auto industry. He stated that Audi’s goal is to be the “top” German luxury manufacturer, but not necessarily in terms of sales. He also reiterated the push for more fuel-efficient vehicles leading to Zero emissions cars in the not so distant future.
Bugatti has unleashed a new concept car the 4-seat, 4-door (can you believe it???) Galibier 16C. Autocar magazine claims the production will start in 2013 at £900,000. We will believe it when we see it! Interestingly, the car’s engine will be the same as in the Veyron but will only sport 800BHP. Apparently, 200 get lost when adding 2 doors.
Rarely does Caterham make the news, except when they unleash new, wildly fun lightweight roadster, but unfortunately, Caterham’s found Graham Nearn died in late October. Nearn has been selling the then-titled Lotus 7 since its introduction in 1959, and then when the car was discontinued in 1973, Nearn bought the rights and has been producing the car ever since and in more exciting, evolving versions. You can even buy a kit and put a Caterham 7 together yourself. If you are not familiar with this brand, you should be!
Its third quarter results for 2009 showed revenues of 396 million euros (£359m) – down from 450m euros (£408m) in the same period last year. It sold 1454 cars, down 4.3 per cent year on year.
However, Ferrari announced that it has grown its market share in every market it monitors, against a drop in supercar sales of around 40 per cent.
