Audi Boss Paints Gloomy Picture for Small Automobiles

audi boss paints gloomy picture for small automobiles

While Europe often appears as a safe haven for punchy subcompacts, the reality is that the continent’s biggest sellers happen to be reasonably sized automobiles equipped with a tepid engine option. The Volkswagen Golf, Toyota Corolla, and Škoda Octavia (especially if you happen to travel through any former satellite states of the Soviet Union) are absolutely everywhere. Europe also has a strong taste for many of the compact crossovers that are popular here in North America, giving subcompacts an increasingly small share of the overall market. And it’s projected to get smaller (globally) under the existing European regulations.

Pint-sized economy vehicles aren’t exactly profit leaders for automakers and their margins are only going to become slimmer. The EU is now reaching a point where building them won’t make sense, as tailpipe regulations will eventually force some amount of electrification. This will jack up their price to a point where the kind of people that might have been considering them will probably shop used. But don’t take our word for it; Audi CEO Markus Duesmann recently said this is probably what will kill the A1.

“We do discuss what we do with the small segments. In the A1 segment, we have some other brands [in the Volkswagen Group] who are active there and very successful, with very high production, so we do question the A1 at the moment,” he told Autocar in a recent interview.

“We will certainly offer Q2s [small SUVs] and the like,” he continued. “That might be the new entry level for us; we might not do anything smaller.”

From Autocar:

The future of small cars has come under sharp focus in recent years. Profit margins have become extremely slim as manufacturers battle to meet stricter legislative and safety requirements, reduce emissions and offer a greater array of technology yet still sell at a palatable price to a market now more interested in SUVs.

The cost of electrifying small cars is proving an even tougher problem, although Volkswagen brand CEO Ralf Brandstätter has said that he’s committed to producing an electric ‘people’s car’ with a starting price below £18,000 (roughly $25,000 USD) as part of the ID range.

Before my EV advocates start posting about tax credits and fuel savings in the comments, it should be said that most people aren’t willing to take the time to calculate the lifetime ownership cost of a vehicle. Furthermore, we’re less than certain one can reliably assume the savings offered would actually offset the price bump associated with electrification. That’s especially true for this segment, where the cost of adding a battery might just push customers into something larger. Small EVs also don’t hold their resale values particularly well and will eventually have to have their batteries swapped out, which might not be financially prudent on exceptionally small vehicles. Audi was even working on an all-electric version of the A1 that was reportedly scrapped in 2020.

It’s likewise tiresome to see the continued advancement of regulations that are supposedly designed to protect the environment and uplift the poor that effectively do neither. By making subcompact and microcars untenable without electrification, consumers will effectively be forced to buy more expensive and less efficient automobiles than could have otherwise been built. But hey, at least the manufacturers managed to protect their bottom line by ending production on the segment comprised of what we used to call “economy cars.”

Audi is already considering which ICE models to eliminate to make way for electrics. VW Group is going all-in with alternative powertrains and its brands are supposed to become awash with new models catering to this. But the CEO made it sound as though some final decisions still need to be made, especially on the European market.

“We have to cut back,” said Duesmann said. “As we look at Q4 E-tron [SUV], we have a model where we have similar combustion-engine-powered models, and certainly we don’t want to have the same portfolio electrically … We make purpose-built electric cars because we can offer more functionality [that way], so we will certainly cut back our combustion portfolio in the next 10 years. We have to and we will.”

[Image: Audi]

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  • TomLU86 TomLU86 on Feb 11, 2021

    @ThomasSchiffer What you describe is disturbing (as this is the direction the US seems to be going). Supply of electricity is insufficient--rather than let the market decide (raise the price until demand balances out), the FRG is resorting to...rationing? I am kind of shocked. I can turn off some lights, but the refrigerator? May I ask, how many Euros a month, for how many KwH (kilowatt-hours) is a "typical" German electric bill? If it's 100 euros, that's really not as bad as you make it sound. Germany is an affluent nation, and unlike the US, most Germans do not have to drive cars as far or as often as Americans...and many don't have to drive at all. Perfect candidates for EVs---oh, but it is challenging to charge an EV overnight if one does not have access to their own parking spot with charger, something much more difficult in densely populated areas (which outside of North America is the norm).

    • See 3 previous
    • TomLU86 TomLU86 on Feb 12, 2021

      @ThomasSchiffer Thank you Thomas, I was curious. That sounds expensive to me, yes. While I do not know if you use electricity to heat your home. If heating is separate (homes heated with natural gas have a separate bill), by US standards, 168 Euros, about $202, is very high. I looked at a recent bill, in Michigan it was $61 for 311 kwh, or say $0.20 per Kwh (is your figure 0,32 euros or 0.26 euros converted to 0,32 dollars--both are high, but 0,32 euros is double, while 0,26 euros is 60% more). Fossil fuels have been good to the West in general and America in particular, but they have many nasty side effects. We are told the nasty side effects are the reason we must get away from them. But, as you say, how can we have electric cars without electricity? The next question may be, "who really needs a car?" and "who will decide that?"

  • Art Vandelay Art Vandelay on Feb 11, 2021

    pieceofchit

    • ToolGuy ToolGuy on Feb 12, 2021

      Self-referential comment is impressive, but can you do a recursive one? :-)

  • FreedMike Back in the '70s, the one thing keeping consumers from buying more Datsuns was styling - these guys were bringing over some of the ugliest product imaginable. Remember the F10? As hard as I try to blot that rolling aberration from my memory, it comes back. So the name change to Nissan made sense, and happened right as they started bringing over good-looking product (like the Maxima that will be featured in this series). They made a pretty clean break.
  • Flowerplough Liability - Autonomous vehicles must be programmed to make life-ending decisions, and who wants to risk that? Hit the moose or dive into the steep grassy ditch? Ram the sudden pile up that is occurring mere feet in front of the bumper or scan the oncoming lane and swing left? Ram the rogue machine that suddenly swung into my lane, head on, or hop up onto the sidewalk and maybe bump a pedestrian? With no driver involved, Ford/Volkswagen or GM or whomever will bear full responsibility and, in America, be ambulance-chaser sued into bankruptcy and extinction in well under a decade. Or maybe the yuge corporations will get special, good-faith, immunity laws, nation-wide? Yeah, that's the ticket.
  • FreedMike It's not that consumers wouldn't want this tech in theory - I think they would. Honestly, the idea of a car that can take over the truly tedious driving stuff that drives me bonkers - like sitting in traffic - appeals to me. But there's no way I'd put my property and my life in the hands of tech that's clearly not ready for prime time, and neither would the majority of other drivers. If they want this tech to sell, they need to get it right.
  • TitaniumZ Of course they are starting to "sour" on the idea. That's what happens when cars start to drive better than people. Humanpilots mostly suck and make bad decisions.
  • Inside Looking Out Why not buy Bronco and call it Defender? Who will notice?
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