\/\/\/ Audi. In truth, Audi's troubles extend beyond the abyssmal resale value of their products. Audi has suffered from a persistent brand image problem almost from the moment they arrived in the U.S., and it's this "nearly great" status that seems to have doomed them to being a perennial second-tier player in the U.S. luxury market. Audi has never, ever been thought of in the same light as BMW and Mercedes-Benz, even with Mercedes' burgeoning troubles. BMW started with the cult-classic 2002 and then built its "Ultimate Driving Machine" persona from there (even though they've managed to adhere to it less and less with each successive new model it seems). And Mercedes-Benz always represented the pinnacle of German over-engineering, an aura first brought to the fore from the "buzz" generated about the cars by returning U.S. service men and women after WWII. And then that aura was solidified with the persona crafted by the famous (and dearly missed) theme "Engineered like no other car in the world" - a brand image theme that should be brought back immediately, by the way. But Audi? It has created a "march to a different drummer" brand persona that was based early on on its almost total embrace of all-wheel-drive capability as its raison d'etre. This persona was best expressed in its early "Never Follow" advertising executions, which have only been a recent development. It has taken Audi 20 years just to get to the point where they finally know and understand who they are, what they represent and where they fit in the "big picture" of the U.S. market. Does this mean they'll need another 20 years before they join BMW and Mercedes-Benz in the top tier? They don't have that kind of time, and besides, if Lexus continues on its upward trajectory - BMW, Mercedes and Audi will all occupy second-tier status in this market before long.
\/\/\/ Audi. Hmm, let's say you're in Audi marketing, and you're well aware of the brand's resale issues and lingering image problems, what comes to mind when thinking of programs and promotional ideas to "elevate" the brand to tier-one luxury status? How about a scavenger hunt! Needless to say, it wouldn't be our first choice, and it probably wouldn't make the first cut of a laundry list of promotional ideas, either. But starting March 18, Audi of America will ask potential buyers of the new A4 to gather nine of the car's improvements via an online scavenger hunt, Adweek reports. The "Sum of all parts challenge," which Audi created with their ad agency, McKinney + Silver, allows those who gather all of the items to enter a contest for a two-year lease on an A4. The contest is coordinated with a larger campaign coincided to break during the NCAA men's college basketball tournament. The scavenger hunt is targeted primarily toward 28- to 35-year-old men, with incomes $75,000-plus, according to Adweek. Players collect the items by looking for banner ads containing them online, which drive them to Audi's website. Not exactly what we had in mind for solidifying Audi's place in the luxury automotive spectrum, but hey, when you're throwing stuff up on the wall and seeing what sticks, this is what you end up with.
wilfred2k5
03-16-2005, 06:22 PM
AutoExtremist thinks. We bought our Audi's because they were good for us, not because of brand image. If *you* want brand image, go buy your look-alike BMW, Merc or Lexus. They're nice cars. I'm so happy with my second A6 purchase, and my planned S8 or A8 W12 purchase in two years that I don't believe I'll EVER purchase another brand.
As for the Audi sign-phrase, it's perfect. Never follow anyone else into buying the same sappy car they have. Get a car that makes you smile everytime you look at it.
Dano_SL
03-16-2005, 06:28 PM
Gator6
03-16-2005, 06:35 PM
You may not care about brand image but I defy you to say you don't care about resale value.
http://www.autoextremist.com/page2.shtml#Rant
A delusional fog hangs over Audi's luxury aspirations.
Detroit. I read with amusement in last week's Business Week that Audi and its dealers are absolutely convinced that their salvation in the U.S. market lies in having an SUV, the seven-passenger Q7, which they're eagerly anticipating for delivery one year from now. My immediate question is this: How can Audi - a car company that has been perennially saddled with the "almost great" moniker for so long now that even they must wonder if they'll ever ascend to the "top tier" of the luxury car market - possibly believe that an SUV, of all things, will be their ticket to greatness?
This is a company, after all, that builds some of the most seductive cars in the market today as far as I'm concerned, but for a long list of reasons has never been able to "crack the code" in terms of image and desirability with consumers, in order to be considered on the same level with Lexus, BMW or Mercedes-Benz (some would even argue that GM's resurgent Cadillac division is challenging Audi in terms of image and desirability these days). I've expounded on the reasons for Audi's perennial second-tier luxury status many times over the last several years, but for all of the things that have either gone wrong for Audi (the "60 Minutes" hatchet job/debacle) or that they've managed to screw up themselves (unrealistic pricing, poor quality), there is one overriding reason in particular that has prevented them from achieving greatness in the U.S. market - and that is their unrelentingly dismal resale performance.
Let's put it this way - if it weren't for Audi's manipulation of the residual values on their factory leases through their captive financial arm, Audi's resale performance would only be a couple of points above nonexistent. When I talk to auto dealer sales professionals, particularly the purveyors of minimally used, high-line luxury vehicles, the consistent thread I keep hearing over and over again goes something like this, "Audi? Nice cars, but when it comes to resale they're dead in the water. We always caution our customers to lease them rather than buy, because if they don't, they'll lose their shirts."
Not exactly what I'd call a ringing endorsement, by any means.
But then again, this isn't anything new when it comes to Audi in the U.S. Resale has been the brand's Achilles' Heel for as long as I can remember. But judging by the comments put forth by Audi executives in the Business Week article, they just don't seem to have a clue about what Audi needs to be concerned with if they're ever going to get beyond spinning their wheels in this market.
Audi prides itself as the car company that marches to a different drummer, one that leads and never follows, and most recently one that is "greater than" its competition. But all of that good old-fashioned German luxury car arrogance doesn't count for much when the realities of the retail market keep intruding on Audi's vision of itself. A vision that is obscured in a perpetual fog of self delusion, apparently.
Let's take the comments by Johan de Nysschen, the head of Audi of America, for instance. He told Business Week that Audi can sell 50,000 Q7s a year. 50,000 in a year? You have got to be kidding me. Why is it that every car executive in the world seems to operate in a vacuum that allows them to believe that they can launch any vehicle, in any segment they choose to operate in, and achieve success as if by osmosis? We usually only get to see this at the Detroit Auto Show, where we have the pleasure of listening to executive after executive insist that their entry into whichever segment they choose to play in will immediately be successful - literally overnight. Even though it was the same segment that another car executive was talking about not ten minutes before.
It doesn't take much to realize that it just doesn't work that way. The "pie" is shrinking by the day, with car companies jostling for tenths of a percentage point - fighting to the death for every scrap of market share they can glom on to. And just because a manufacturer deigns to show up in a segment doesn't necessarily mean that success will automatically be achieved.
Audi's de Nysschen didn't get that memo, apparently. Fifty thousand Q7s right out of the box? Come on, Johan. Would you like to delineate for us as to whose hide you think those sales will come from? Or are you insisting that Audi will add 50,000 buyers to the market based on the brilliance of Audi's Q7 alone? Please.
Audi dealers, of course, are absolutely thrilled with the Q7, which is not surprising. Dealers usually believe that more new product is a ticket to salvation, especially when their idea of salvation is measured out in 30-day increments. But no matter how good the new Q7 is, it will not address Audi's core problem. After all, a hit SUV won't count for much if Audi's reputation is still one of precarious resale - and thus a brand that should be avoided.
Audi is desperate to play with the established leaders in the luxury car market. And well they should be. They create beautiful cars that are for the most part wonderfully executed. But wishing and hoping isn't going to get it done. And pretending that an SUV, no matter how exceptional, will transcend all the ills and weaknesses of a brand, is a nothing but a fool's errand.
Audi's horrendous resale performance should be Johan de Nysschen's number one priority. And until it is, the delusional fog will hang low over Audi's luxury aspirations.
Thanks for listening, see you next Wednesday.
<i>(BTW judging from all the traffic on this forum I think your full of crap if you are trying to convince me that brand image isn't important to Audi owners...that's pretty much all that is discussed here; from debadging to wheel gap and quattro it's all about maintaining 'appearances' and the brand)</i><b> Gator 6</b>
Gator6
03-16-2005, 06:43 PM
What? Naddy, Are you some sort of fanboy? I'm trying to inspire some debate around here.
I really want to get a nice new A6 but I struggle with the obvious deficiencies in the Audi brand. I really want to enjoy a nice new A6 but if the resale value is going to tank that is a pretty compelling reason to look elsewhere.
If you want to add something to the debate go right ahead. But don't think for a minute that I'll go away just because you said so.
If your brand really is that great then stand up for it. I mean can none of you take a little criticism? Really?
[BTW the Dakar Beige A6 3.2 I want is still sitting forlornly on the lot after 3 months - with lots of its sisters, they aren't moving in Detroit]
hkallroad
03-16-2005, 06:53 PM
and besides I would rather buy a car that I love than getting one that has a better resale value.
That's why I bought 5 Audis and 1 VW during the past 12 years....
wilfred2k5
03-16-2005, 07:29 PM
Actually, I care not in the least about resale value because I *do* lease. If you have constructive criticism...features, problems with your Audi, how to mod your Audi, everyone here is interested. If you just want to 'dis Audi, well... that's kinda like walking into a mosque and insulting Mohmammed. You'll be lucky to get out alive.
99% of the people here love Audi. In my opinion, it IS the best car out there, at least for me, and I care not in the least what ANYONE else thinks. I have tons of co-workers who are so into their SUV's, BMW's, Merc's, even Jeep's. Yet, when the day ends and I go home in my brand new A6, I don't think twice about them.
Now, if you have a question, answer it. But if you're just trolling to make trouble, I for one, am not going to answer.
April
03-16-2005, 07:58 PM
the Audi reputation took a huge hit with 60 Minutes, and a less than always stellar dealer body contributes as well. There is nothing wrong with the car itself in light of the offerings of BMW and Mercedes. Thanks to 60 Minutes, sales dropped from almost 40,000 cars in '85, to 14,000 in '91. Had this not happened, BMW would probably be a niche player here like Porsche.
When the 60 Minutes scam came along, the German execs assumed that people would use their brains and see through the BS. Of course the public did not, and not only did sales tank, but dealers vanished overnight. Many of the people who picked up Audis for cheap after, didn't know how to maintain them, nor did they have the resources to maintain them correctly (basically the car fell out of the socio-economic strata for which it was designed). Audis got a bad name simply because many of the post '86 owners thought the car would be as cheap to maintain as it was to buy.
In Europe, Audi has a history almost as long as Mercedes, and far longer than BMW. You have to understand what happened. The problem is that the contemporary Audi name and brand identity are an artificial construct after VW bought the brand from Mercedes around 1970 (Mercedes absorbed the brand after the war). Mercedes wasn't doing much, but was starting to line up designs for a cut-rate Mercedes, only they would use the Audi name to market it. Well, VW stepped in right around the time that NSU was also absorbed due to the failed Ro80. That car was incredibly advanced and Audi took many of those features and created the 5000. So instead of becoming a cut-rate Mercedes brand, they became a premium VW brand.
At this point, China buys almost twice as many Audis as we do, and they make more money on each car due to reduced overhead at the dealer and service level.
As for the scavenger hunt, many Audi owners are very technical (nerdy?;-) and enjoy that sort of challenge. Is it ideal? No, I don't think so. I'd like to see more comparative ride and drives that travel from city to city, but that costs a lot more money.
Most people who choose an Audi, do so because of what it isn't - a Mercedes or BMW. Do you buy a car for yourself, or the next owner? Do you choose options in light of what the next owner might like? If you can afford to <i>buy</i> a car in this class, resale may have some consideration, but it isn't going to be the driving force. The lower price is simply icing on the cake that helps seal the deal. That helps offset the difference in resale down the road if you buy. If you lease, it's a moot point.
Dano_SL
03-16-2005, 08:24 PM
We are not here to convince you to buy and Audi. Someone with a post count of 3 errr now 4, isn't going to stir up much of a debate with that bashing post. I'm not going to defend a car because I can care less what anybody thinks about what I drive. People like what they like, hell there are even people out there who love there Pontiac Gran Prix. Once again, if you don't like the car don't get one.
Dano_SL
03-16-2005, 08:27 PM
That is the biggest reason I bought an Audi. It's not a BMW or Merc. Was at the mall on Sat. and must have seen 20+ BMWs and only one Audi, it was mine :)
sacguy
03-16-2005, 10:15 PM
I thought your post was on target and very thought provoking. Most people care about brand image and resale value - they are both areas of pride, value and smart car purchasing logic to just the crowd Audi sells to and wants to sell to. An advantage can be gained by smart marketing, even if that brand image is somewhat obscure - like Audi for example. To me Audi means sporty, high quality that is "smarter" and not at all "blingy" or pseudo classy like a Cadillac Escalade or some MB models. BMW has a secure brand image that has a youthful sporty edge to it. Audi just needs to cultivate its classy, never follow, slightly below the radar, "classy - sporty" and "intelligent choice" image better. Marketing creates perception and brand image. Getting the word out subtly to appeal to the smart but not ostentatious buyer could work very well for Audi and boost resale values too.
SFV A4
03-16-2005, 11:21 PM
Audi's are HIGHLY regarding by anyone who knows anything about modern cars. Audi is a VERY successful car company since the first A4 debuted. None of the comments Autoextremist made face up to reality in 2005. Here in L.A., Audi's are great sellers and can be seen all over the road. And I don't know what they are talking about as far as bad resale. I have tracked pre-owned prices of A4's and they are way up there. Case in point, I sold my '99 Passat for $2ooo more than what VW said it was worth before my lease was up. I plan on doing the same thing with my A4. The cars hold their value. Finally, those who pick up an Audi do not buy the car for it's name or ego. They are not pretentious drivers like many BMW and MBZ owners. I bought mine because it's got much of EVERYTHING going for it in ALL categories. It's sporty and elegant on the outside, and modern, artful, and luxurious on the inside. Gets great gas mileage, has plenty of zip, handles like it's on rails, is brimming with the latest safest innovations, was priced lower than anything comparable, and has a fantastic warranty. All I get is compliments on the car and people asking me more about it. It has also been bullet-proof reliable and lacking any defects. I have many friends who think the same way regarding theirs. Audi owners are not vane in their purchases. They simply know a good thing and have done their research. If you believe the hyped crap spewed from Autoextremist, you are totally being misled. Open up any car magazine test article from 1996-present and read the accolades yourself.
Jim Schnabel
03-17-2005, 04:57 AM
Audis were everywhere in the Neatherlands and Belgium where I visited last year. I go to China in June and will probably see more of them.
And besides, how long will it be before Mercede's horrendous repair record catches up with them? They're used as taxis in Europe.
I don't buy cars for resale value. If I want it, I get it, because as the advertisement goes, I'm worth it.
98 2.8 A4
02 4.2 S6
Goldmember
03-17-2005, 05:09 AM
But they are an honorable journalistic body. They would never present fake documents to support their opinions.
I really think you have them all wrong April.
< sarcasim />
Fleuger99
03-17-2005, 05:50 AM
I Agree with you!! I'm a South African guy living in the US now for about ten years after going to university and living in Canada for a number of years. North American's (US & Canada) look at cars (many products) in a very different light than people in SA (South Africa). Here, people really consider resale values because people here buy/lease a new car every few years. Branding is also huge here, less so than in SA. In SA one buys a car with the intention of keeping it for 7 plus years. Also, unlike in North America, Audi in SA is seen on par with MBZ and BMW.
I am taking delivery of my C6 3.2 in about three weeks and I purchased it because of the whole package. Great features, sporty performance, fantastic looking car, wonderful interior and AWD as I live in the North East. Second tier reasons that contributed to my decision were things like branding and free 4 year maintenance. I never considered resale value as one of my criteria. I hope I have the same experience as 90% of the posters here, love their cars with little or no problems. If that is the experience for most of the new C6 cars, Audi's brand can only improve.
Craig
Audi S5 TC
03-17-2005, 05:57 AM
And his name is Gator6. So get lost, scumbag.
Audi S5 TC
03-17-2005, 06:03 AM
Overseas, Audi does very well. In fact, with a few exceptions, Audi scores very well in surveys for customer satisfaction, quality, reliability and dependability. And their resale value overseas is top notch. Plus, Consumer Reports recommended the A6 from early 2000 and prior due to average or better than average reliability. And, as of late 2004, CR recommends the A4 due to average or better than average reliability. Audi outscored BMW and Mercedes in JD Power and Associates 2004 customer satisfaction survey. Audi also matched BMW in JD Power and Associates 2004 quality study. And FWIW, with the exception of the UK (where Jaguar's resale value is good), Jaguar and Land Rover have the worst resale value in their class worldwide. Yes, worse than the Audi you so obviously despise. So leave, jerkoff.
moveout
03-17-2005, 07:33 AM
The market for used Audi's in the US is huge due to their lousy resale value. Not to mention the fact that they're fun to drive, good looking, etc.
Pretty good bang for the buck.
April
03-17-2005, 08:33 AM
darbikrash
03-17-2005, 08:48 AM
Well of course resale value is important, and for the most part I agree with the AutoExtremist diatribe. To me, Audi has supplanted the leadership role in engineering that Mercedes gave up in the '80s when the marketing people took over the company. Is this what we want? I ENJOY the idea that Audi is a brand that cannot be appreciated by the mass consumer. This is a brand that is appreciated by those not normally swayed by mass advertising, that think for themselves, not what their neighbors think.
As to resale, many people buy Mercedes not because of feature sets and status, (although status plays a role for many) but for preservation of the investment. Do you think the investment bankers that bought S class cars bought them for the leather seats? No, they bought them because the perceived value after several years of ownership was higher than other brands. What would you expect an investment banker to do, buy a performance car? Many wealthy buyers are heavily influenced by the principle of high resale value, and low true cost of ownership. That's how they became wealthy buyers in the first place.
To a different extent, similar principles apply to BMW, interchanging performance and status (primarily status) for value. The status component helps create a strong secondary market for those marginalized buyers who cannot afford to buy new. But no one knows whether you bought new or used when you're driving down the 405 freeway.
Auid fits neither of these models, and overall the brand REQUIRES a certain amount of automotive knowledge, and perhaps a little counterculture sensibility to select over the competition. I would submit that Audi has to some degree compensated for the lower resale value by having a larger feature set for a lower price. Lower going in, lower going out. What's the difference?
So although resale matters to the mass consumer, and the investment banker, it's not so important to the freethinkers. In So Cal, arguably a tract home in a planned community is a better investment than a custom home, but you won't find me living in one.
I'm quite sure that those poor fools with their matching leased E class cars and suburban uniformity are having a high time calculating how much their homes appreciated last night, and how high the lease residual is on the MB.
You can have it.
hemants
03-17-2005, 10:38 AM
adam in jersey
03-17-2005, 12:22 PM
That's great that you don't care, but even those of us who "can afford it" (whatever that means), don't want to feel as if their car is depreciating faster than other comparable models. My A4 3.0Q is worth far less than a comparable BMW. I also own a V-8 Touareg. Great truck, terrible resale. I don't like losing so much money to depreciation. I chose to buy a new BMW 545 instead of the new A6 4.2 and one of the factors was definitely resale. You guys have to learn to stop attacking just because someone tells you something you don't like.
Audi S5 TC
03-17-2005, 12:44 PM
You think Audi has bad resale value (which it does) you haven't seen anything until you have seen Jaguar and Land Rover. Their resale values are the some of the worst on the planet. Not that you would know any of this, Gator6.
April
03-17-2005, 12:49 PM
Audi S5 TC
03-17-2005, 12:52 PM
But Consumer Reports rates reliability of the E60/E61 5 Series as bad as the E65/E66 7 Series (i.e. worse than every other car out there). Yes, worse than Jaguar, Land Rover, Mercedes and Volkswagen (all of which are now tied for second worst). And substantially worse than Audi. Anyway, good luck with your 545i. You will most definitely need it!
moveout
03-17-2005, 12:59 PM
If a "smart" banker wanted to really preserve his/her investment, the last thing they should do is buy a Mercedes. Buy a Lexus, or Camry, or Prius, or a Corolla. Or go all the way and ride the bus. Then invest the rest carefully.
-- Way, way less expensive.
-- Relatively insignificant depreciation.
-- More reliable.
-- Lower maintenance costs.
-- Lower operating costs.
-- Better service.
Sorry, but nobody that purchases a luxury vehicle is trying to save money.
nickle and dimers. Hound you for every penny on a $5.00 purchase and want a bargain on everything. Many wealthy people became wealthy by being cheap.
moveout
03-17-2005, 01:13 PM
I'm saying that they save their money so they can indulge in luxury items like cars, boats, etc.
They make luxury purchases knowing that there are more fiscally responsible ways to spend their money. It's a conscious decision to spend, not save.
nirad
03-17-2005, 02:16 PM
Audis success in the US will follow their recent success in other markets- it's a foregone conclusion.
And as for resale, Audi is now making the most reliable German car sold in America. That will be tremendous for resale value.
SFV A4
03-17-2005, 02:22 PM
shows the A4 as more reliable than most any other German car in the same class. I can't believe we are actually trying to defend Audi here in this post. Audi is one of the biggest success stories in auto history since the mid-90's. Other car makers use it as their benchmark when they redisgn their cars, especially the interior and exterior styling.
no.radar
03-17-2005, 05:53 PM
SFV A4
03-17-2005, 06:04 PM
owners of all cars. Gathering information from other drivers and first-hand experience help form an accurate opinion. I have found some magazines to be off and some to be on target. But generally speaking, CR's reports on reliability are a good way to gauge overall reliability as a whole. All the vehicles I have owned have come close to what CR has said.
RXBG
03-17-2005, 06:37 PM
A4_Chi
03-17-2005, 07:15 PM
Gator6
03-17-2005, 08:06 PM
You know I am genuinely not trolling. I'm presenting articles and asking for justification from those who know the brand better than I.
I have said repeatedly that I have been shopping the A6 for 3+ months. I have concerns and articles like the AE one raise those concerns even further.
Bringing up resale in Europe and China does nothing for me, I live in North America. Resale is a concern for me - but it is the drivers of resale that are even of greater concern. That's reliability, dealer network, and perceived brand value. BTW those of you touting leasing - well leases over sales is one of the thing Delorenzo suggested in AE because you'll lose your shirt on a purchase. Leasing over purchasing is also a driver of resale values. And resale values affect what happens when you try to turn in your car at lease end.
Personally I like buying my cars and owning them for about 8 years (which is counter to the advice on Audis from AE and some of you). I take good care of them and save all my papers. I want the money back at the end - I can afford an Audi but I can't afford to throw money away on it.
Congratulations to those of you who can drop $50K on a car and shrug off concerns like resale -I'm not one of you yet.
If nothing else I am happy to have inspired a heated discussion. Look at the number of thoughtful posts that resulted - but I am not trolling.
And I stand by my earlier statements. I'm here because I think I very much want a new A6, but even more than that I want the best car for my money.
Gator6
03-17-2005, 08:17 PM
Um, when did I ever say I had any interest in a Ford... I mean a Jaguar or a Land Rover?
Timbilt, you may know a lot more about Audis than I do but I am willing to bet I know a lot more about cars in general than you do. I also know how to carry on a conversation without ad hominem attacks and without being an ass.
But thanks for your helpful commentary. (Thanks to April for trying to keep this conversation civil too, sorry I failed you on this one)
April
03-17-2005, 09:10 PM
With average miles driven (12 to 15K per years), that's over 100,000 miles. At that point no dealership wants it, no bank will finance it, and no warranty company will warranty it. That makes it an extremely expensive car to own for anybody who knows cars, and those who don't know that truism, won't have much cash on hand anyway.
If you're going to live with a car that long, go with what floats your boat. The only caveat I have is that BMW has really been in the dumper with iDrive issues, so avoid as many electronic goodies as possible. Of course that applies to any car you plan to keep a long time:)
Since there is usually a $3 to 7K price window between an Audi and comparably equipped German sedans, you can see by the figures below that there isn't anything to be gained by going with the other brands. Pick the car you like best.
Kelly Blue book suggests that an 8 year old A6Q with 100K miles and in excellent condition should sell for around $9K private party. That's probably a tad high, but you get the picture.
A similar BMW 528 would be around $12K.
The E320 would be around $12K as well.
Gator6
03-17-2005, 10:02 PM
Thanks for the info April - of course I understand the mechanics of the long life car. I still value resale value because of the inherent factors that go into it. Maint., brand, availability, etc. Cars are not investments they are depreciating assets - nevertheless I want a car I love driving.
And while I LIKE to own a car for about 6-8 years I have sold them from anywhere from 3-8 so it still becomes an issue. I guess what I'm saying is like to keep my options open - and don't like to choose cars that artificially limit those options. But I'm most concerned with the <b>causes</b> of low resale value - rather than the resale value itself.
BTW my current BMW 328i Convertible is 8+ yrs old and just creased 100K miles. I love that car (and it has been solid as a rock with only one signif. maint problem over the life of the car)
April
03-17-2005, 10:40 PM
(or plan to), pick the car for you, not the next owner. As you point out, they are depreciating assets. In this case you pick between spending less up front now (and hopefully investing the difference in an appreciating asset), with less return on the automotive choice down the road, or you can spend more up front, and hope to cash out for slightly more at the end. In the end, nobody has a crystal ball. Brands can tank for any number of reasons. Audi has been on a long slow climb. I think they'll continue to claw their way up, but there is no quick fix.
As you no doubt realize, a high end luxury car is very hard to unload in the first 4 years or so, due to factory incentives and extended warranty programs on the new models. It's once the car becomes affordable to a new tier of owners (usually half the original price), when the market opens up considerably for easy resale. If you think for any reason that you might have to unload the car sooner, do yourself a favour and lease the car for the term that will suit you best. You'll have a known residual that if you really like the car, you can buy out the lease or move on to the next thing. You'll put down less money up front in the form of drive-offs, and your monthly payment will be less than if financing. Invest that cash in something that appreciates. Of course breaking a lease is difficult if the unforeseen comes up.
darbikrash
03-18-2005, 09:06 AM
Of all the points in my post, I'm curious as to why the comment on MB buyers spurs the interest, particularly in an Audi forum.
To follow this logic, wealthy people would live in grass shacks and ride bicylces, not drive luxury cars. Whats missing here is that wealthy people are image conscious, and most have a certain standard of living that they must stay within. Even the most frugal person has to confront the reality that money is a worthless tool if it is not used, and used properly.
It is this theme of using money properly that drives the investment banker type to purchase consumer products with high value. Having money enables such a person to choose based on value, and not be constrained by the purchase price. It is the intersection of this principle with the need for status that creates the MB value proposition. And to wit, it seems than MB has succeeded in positioning themselves as a high value vehicle, with high percieved resale value and good safety record (although it would seem that the numbers say otherwise) and they capitalize on this by charging a lot for it.
So this turns out to be a nice fit for a status conscious buyer who wants to feel conservative and feel that he may get a higher return at the end of the party. So the banker buys. The doctor buys because the banker buys. And a whole crowd of lemmings buys because everyone else they aspire to be buys MB.
It's interesting how this whole cycle started, and that's because Americans traveling to Europe noted large boxy shaped 4 door sedans that seemed to last forever. These early adopters were enthralled with the European experience, and looked deeper at the MB cars and found a car manufacturer that was run by engineers. The cars were designed until the engineers were satisfied that the car was the best they could produce. Then the marketing types were called in to set the price.
This was and is exactly the opposite of the way US business runs, and this approach found buyers (usually wealthy, well traveled buyers) that appreciated that lots of money was spent in areas of the cars that could not be seen. They interpreted this (correctly) as having high value, and bought these cars, setting off a landslide lasting several decades.
Fast forward to today, and the roles inside MB are reversed. The company is run by marketing types, and the cars are designed to a price point. The worst part is that they are still riding on this old reputation of high quality, and it's just not there anymore.
that's why i love the S and RS series...you're gettting a very high performance vehicle, but you're not announcing yourself as you drive down the street (i.e. merc or bmw or porsche). only the informed know. i can pull up to anyone's house and they may detect that it's a nice car...but they don't have to know HOW nice! understated and discreet. that's how i'd like to think it is, at least.
Life Rules
03-18-2005, 11:16 AM
HOT! That car was smooth and beautiful. I caught myself drooling...
adam in jersey
03-18-2005, 12:13 PM
Your not raining on my parade. You have just confused reliablity with resale value. While the two "may" be related they are not the same. I can assure you that my E60 will be worth more in percentage terms than an equivalent A6 4.2.
adam in jersey
03-18-2005, 12:15 PM
Should have said worth more at the end of year three.