Even In Germany, $20k Is Too Much For A Subcompact
Ever since four-door coupes became a dime a dozen, the European auto industry has been looking for a new niche, and for much of the past year or so, it seemed that the next big thing would be “small premium.” Inspired by the MINI, European automakers from Alfa to Audi have been trying to get consumers to spend big money on tiny, plush cars. But with Audi’s A1 starting at €15,800 ($20,873), it seems that even the efficiency-happy Germans aren’t willing to pay the price of entry for this new niche. Audi built capacity for 100k A1s at its Brussels plant, but since introducing the car in August, Audi has sold only 20k of the pricey subcompacts. And yes, the slow sales do seem to be tied to the exorbitant pricetags.
AutoWeek reports
”Audi is simply asking too much money for a small premium car,” Metzler Bank auto analyst Juergen Pieper told Automobilwoche. He said Mini could charge high prices for its models because the brand has a cult status.
Some German dealers believe Audi has priced the A1 far too high for the the young target group at which it’s aimed. ”For them it is simply too expensive” a German Audi dealer told Automobilwoche.
And no wonder: sales of small cars are down across Europe in the aftermath of the world’s largest Cash-for-Clunkers-style incentive program. Plus, gas remains relatively cheap around the world. And with the A1’s downscale cousin, the VW Polo, retailing at €12,275 and up (and the Skoda Fabia starting even lower), there are plenty of fairly-premium subcompact alternatives available at much lower prices.But Audi insists that nothing is wrong with the A1, sayingThe A1 is enjoying considerable success: The company stands by the estimate made at the time of the car’s launch that around 50,000 units will be built by the end of 2010 and 30,000 of them delivered to customers.But actions speak louder than PR talking points, and Audi is pushing the release of a five-door variant of the A1 forward to 2011, a year earlier than it was initially planned for. But with an entire niche hanging in the balance, it’s not clear that two more doors will justify Audi’s gamble that Europeans will pay compact prices for a subcompact car.
More by Edward Niedermeyer
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I've not understood VWs plan. Taking the Passat upscale could cannibalize A4 sales. Especially since the newer A4 appears to be Passat-sized. Is every Phaeton sold an A8 that is not? So where does that leave the 1 and 3? Competing with Polos/Golfs? I guess it all makes sense, somewhere. But it's not very intuitive to the outside observer.
Auto manufacturers know that among what was the first car owning demographic (18-25yo), they're not interested in cars at all, especially in Europe.