[quattroa4]

Dear BHPiens
here are some pics of the manufacturing facility of these three brands at a single location at aurangabad .
skoda assembles its laura ,octavia and superb range here as the fabia's production has been moved to its chakan, pune plant .
VW assembles the passat and jetta over here , jetta shearing the production line of laura in the mean time .
audi uses its own dedicated assembly line for its A6 and A4 and only these two are assembled here ,rest of the range as cbu.
now the question is why audi A4 & A6 prices are so high compaired to bmw and mercedes ? as there is no initial capital investment whatsoever, these models should be cheap compaired to its rivals. and i think that is one of the reasons audi's sale in india is nowhere near bmw or merc . make it cheap by at least 3-4 lacks and it migth go ballastic .

[AlokSriva]

Originally Posted by quattroa4

now the question is why audi A4 & A6 prices are so high compaired to bmw and mercedes ? as there is no initial capital investment whatsoever, these models should be cheap compaired to its rivals. and i think that is one of the reasons audi's sale in india is nowhere near bmw or merc . make it cheap by at least 3-4 lacks and it migth go ballastic .

Well, there isn't too significant difference between the price of A/B/M in respective product segments.

In order to break-even, Audi apparently has intentionally kept the margins high to ensure that even a relatively smaller number is able to generate the projected top- and bottom-lines.

Another way of achieving this could have been keeping the margins low and therefore, at a competitive price, let the increased sales take care of achieving the break-even.

However, latter strategy could have been discarded on two counts-
1) Audi's brand dilution if priced lower than BMW or Merc; and
2) Customers of these segments buy vehicles not becaue of utility but because of snob value associated with the product. And therefore, are not too price sensitive, hence, why lower the margins..

For argument's sake, let's say even if there is zero initial investment for starting Audi's assembly operations in India, manufacturer would still not sell it at a price point which makes the product lose its perceived (read - snob) value.

[ashthedivx]

Looks like recession is in full throttle for Germans Still, I would say it is a good move as all are otherwise also controlled under same umbrella.

[FlyingSpur]

The Skoda folk at Chakan must be chilling all day.

[quattroa4]

Originally Posted by AlokSriva

Well, there isn't too significant difference between the price of A/B/M in respective product segments.

In order to break-even, Audi apparently has intentionally kept the margins high to ensure that even a relatively smaller number is able to generate the projected top- and bottom-lines.

Another way of achieving this could have been keeping the margins low and therefore, at a competitive price, let the increased sales take care of achieving the break-even.

However, latter strategy could have been discarded on two counts-
1) Audi's brand dilution if priced lower than BMW or Merc; and
2) Customers of these segments buy vehicles not becaue of utility but because of snob value associated with the product. And therefore, are not too price sensitive, hence, why lower the margins..

For argument's sake, let's say even if there is zero initial investment for starting Audi's assembly operations in India, manufacturer would still not sell it at a price point which makes the product lose its perceived (read - snob) value.

yes i agree with you , but then take the case of bmw 320d CE . they made it 6-7 lakh cheaper and now look everybody is jumping on it , 293 sold in one single month of march . now compare them with C and A4 and you will get the picture. though snob value is important but here in our country price is the single decision making aspect even the rich cant resist . look at the number plates os so many exotics and you will find it a yellow one . though beemer it only outsold the compitition when the prices were lowered considarebly.

[prateekm]

Cool! Do they allow guests/potential buyers/german owners to visit the factory or get a tour? Some more pics are needed, please

I guess there was a similar thread on Skoda plant on TBHP.

[AlokSriva]

Originally Posted by quattroa4

take the case of bmw 320d CE . they made it 6-7 lakh cheaper and now look everybody is jumping on it , 293 sold in one single month of march . now compare them with C and A4 and you will get the picture. though snob value is important but here in our country price is the single decision making aspect even the rich cant resist . look at the number plates os so many exotics and you will find it a yellow one . though beemer it only outsold the compitition when the prices were lowered considarebly.

Now that you have brought up the CE from BMW, I am so very tempted to go OT here

320d CE has been a brilliant marketing masterstroke from BMW. In one sweeping move, it ensured the following -
A) Short Term -
1) Making the brand more affordable (mind you - affordable only so far as entry cost was concerned), and therefore, increase the top-line.
2) By boosting sales of cars, they ensured the add-ons (BMW Secure, BSI) were being sold. Again, the cost of these add-ons is the same whether it is for CE or not.
3) Left competition (Merc) running helter skelter and coming up with similar low-frill edition of its own. This established in the minds of customers the fact the one-upmanship of BMW so far as aggressive marketing goes.

Long Term -
1) A derivative of increased sales is maintenance as all cars sold would enter the service station at some or the other point of time when the customer has to actually pay for it.
2) Building a segment where none existed earlier without diluting the brand.

Now, I agree with you to a certain extent on the price sensitiveness of Indian buyers - even those who are buying such snob products. However, it does not ensure that a lower priced product would really outsell a higher priced one. Case in point - Q7 and Touareg, former being a shade expensive outsells the latter by significant numbers.

[quattroa4]

ok ok ! but wait for thet last one , Q7 vs Touareg , the later one has just been relaunched and going by its nos in march it did a very good job of selling 37 odd nos againest 54odd of q7 . lets wait for that stuff , it will catch very soon with that .but anyway Q7 is the biggest seller as well as brand setter for audi then any other model though it is expensive .
But now it sells here because of another reason which is very predominant here in our country that "big is better and biggest is the best ". if not for this mentality then porsche cayenne should have been a bigger hit. though size is big , it dosent intimidate you . point in case , take a example of fortuner.

[dragstar]

When is the VW Tiguan coming to India? Any idea about the price tag?

[AlokSriva]

[quote=quattroa4;1864490]ok ok ! but wait for thet last one , Q7 vs Touareg , the later one has just been relaunched and going by its nos in march it did a very good job of selling 37 odd nos againest 54odd of q7 . lets wait for that stuff , it will catch very soon with that .but anyway Q7 is the biggest seller as well as brand setter for audi then any other model though it is expensive .
quote]
Well, the numbers for Jan, Feb and March are as under -
Q7 - 58, 43 and 14
Touareg - 28, 9 and 30

Q7's number went down because of the fact that 3.0 has been discontinued and 4.2 is round the corner. Therefore, Audi was only clearing the bookings of 3.0 in March.

Touareg has a similarly different story - upcoming facelifted version/new model. However, numbers of Touareg went up in March because of the deals being offered because of end of shelf life of the existing model. In March it was the old model which was being cleared off.

[quattroa4]

to my knowege ,VW has no plans to indroduce the new model of touareg untill the end of year 2010 . they will continue to sell this facelifted version as they plan to introduce newer one with hybrid only. lets watch but thats aint coming soon over here

[FlyingSpur]

@ quattroa4 : If Audi were the first to come up with a cut-price A4, I honestly think people would still not have jumped on it the way they would the BMW CE or the MB EE. Audi just doesn't have the brand equity that the other two command. Believe me, I'm a big Audi fan and went with BMW largely because of BSI, so don't get me wrong here.

When Audi cuts prices, it's viewed from the perspective that they aren't selling so they have to do it to clear stock / attract customers or whatever. When BMW / MB do it, it's a fantastic buy at a lower price and oh lookie, everyone can get one it seems.

I don't agree with this mindset, but it's true and hard to argue with. The A6 "anniversary edition" or whatever. 37L ex-sh and there are hardly any around. Heck, does anyone even care that it's Audi's 100-year celebrations or whatever else it is they're celebrating? People don't even KNOW !! Audi's marketing fails miserably. And VW's too frankly. Both have attempted lovely newspaper-full features and it simply isn't translating into sales.

[AlokSriva]

Originally Posted by flyingspur

@ quattroa4 : If Audi were the first to come up with a cut-price A4, I honestly think people would still not have jumped on it the way they would the BMW CE or the MB EE. Audi just doesn't have the brand equity that the other two command.

When Audi cuts prices, it's viewed from the perspective that they aren't selling so they have to do it to clear stock / attract customers or whatever. When BMW / MB do it, it's a fantastic buy at a lower price and oh lookie, everyone can get one it seems.

Bingo! You've hit the bull's eye and I completely agree with you on this.
It is a severe catch-22 for Audi so far as pricing of its vehicles in India is concerned.

[ahmed26]

Do u guys think it is fair to compare a 5 seater and a 7 seater [q7 and touareg]?

[FlyingSpur]

Off topic, but I want some of these Mumbai miscreants to go and steal those bloody king-size monograms off the factory wall. Maybe that way the manufacturers will take the problem seriously and think of a solution to the monogram-flicking plague that's afflicted Mumbai and other places.

I know, it's not the manufacturers fault, but the cops aren't doing anything about it. Sigh.