A4 sales are trending downwards
03-15-2002, 12:43 AM
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A4 sales are trending downwards
A4 Sales
1999 32463
2000 34463
2001 ?????-can't find the number
Nov-00 2753
Dec-01 4120 Dec-00 3282
Jan-02 3575 Jan-01 2682
Feb-02 3406 Feb-01 2549
When you compare versus last year the A4 is doing well. However, that wasn't a new model year so that would be comparing apples and oranges.
So when you compare the last 3 months, sales are down 13% from Dec to Jan(not real accurate because they were pushing 2001 models in Dec), and down 5% from Jan to Feb. I seriously doubt March will be stronger than Feb. I would expect the number to come in at about 3236 or down 5% from Feb, at least. Wouldn't be shocked if sales dropped around 3000 though.
I haven't said what is the force that is causing sales to slide. I don't care what it is but I could speculate it could be one of the following or several of the following: the newness running off, issues with the car, market, APR, better alternatives, the list goes on and on. Car companies are companies, they are in it for the money which makes it easy to predict their next move, products, etc. Bad management though and no one knows what will happen even if they have the best mousetrap in the world.
Audi will have to sell 2,784 cars each month for the remaining year to hit their 2000 number. I couldn't find the 2001 number but presumably it was at least 10% better than 2000 which would mean they need to sell 3,092 cars each month for the next 10 months. The trend line suggest they won't be able to do this without some deep discounts on APR, relax on % over invoice or even under, free extended warranties, mass marketing, etc. I would say too that the dealerships are beginning to slightly feel an impending crunch right now, manufacturer will feel it in 30-45 days after. If the manufacturer doesn't drop APR or other, then 2003 A4 model could have something fairly significant, new and improved which would probably mean they could hit their 2002 forecasts. i am making an assumption that Audi execs are good, which most evidence supports that they are. BTW that is one reason why car companies don't start shipping new year cars on the 1st of the year or else their sales wouldn't trend well and they would have a hockey stick affect. It appears at glance there are bigger or just as big issues with sales of the A8,A6,and TT.
What does that mean to you right now? Pay no more than 3% max over invoice. Start at 2%. Remember, this is economics with the law of supply and demand dictating market conditions. A salesperson not making much commission on a car is just a variable condition not associated with supply and demand and should have nothing to do with any financial purchases unless commission is directly part of the sale price. Art dealers are an example. This would hold true too with level of service as that condition is inherent to the price/value perception of the car. Variables like service, service quality, friendliness are essentially add-ons or intangibles that are used to persuade your decision to buy but should not influence the price of the car. Remember, you are buying a car, service is included. It could influence where you buy it though. Service, friendliness and the like do not dictate nor influence the laws of supply and demand. Or as I like to say, service, friendliness, etc doesn't make the world turn, money does. In summary, you are not responsible for the income of a salesperson, if anyone is responsible it would be the car dealership which would then mean the car manufacturer in which case the car manufacturer probably needs to realign itself with perception, quality, price which translates eventually into what value they place with regards to salespeople commissions selling the perception and quality. Let's face it, being a car salesperson is not necessarily and easy living. If you want to help a salesperson out, then drive down to the dealer and hand them $500. In the big economic picture, you are actually doing a long term disservice to salespeople by being easy targets for them. Car sales industry needs massive reform but it will have to get worse for salespeople before the industry opens the gate to changes that will dramatically improve a salespersons life. Both sides of a car sales are sick and tired of the process and reform will begin undoubtedly occur sooner or later. In the old days, food was sold directly to the consumer in a very similar. Last time I walked into a grocery store I couldn't haggle over price.
If you were to wait on a car, you will likely see deeper discounts on APR in the coming months not just from Audi but from others as well. They have little choice otherwise they will slow their inventory channels thus increasing manufacturing overhead costs substantially.
The above numbers are a bit screwy because when I looked at the past press releases they didn't seem to tie completely from one press release to the next....Also they appear to mix up their press releases making it more difficult to paint a clear picture. Having said all that, this is only my humble opionion.
Does anyone know of a site with numbers for each month? Better yet would be the average sales price of the A4. Might need an Audi employee for that data though.
BTW, this little analysis all came out after a sales guy started jerking my chain...Sales were "way up" according to him. That is such a broad statement. While he was partially right on 1 account(year over year) he was wrong on several others.
1999 32463
2000 34463
2001 ?????-can't find the number
Nov-00 2753
Dec-01 4120 Dec-00 3282
Jan-02 3575 Jan-01 2682
Feb-02 3406 Feb-01 2549
When you compare versus last year the A4 is doing well. However, that wasn't a new model year so that would be comparing apples and oranges.
So when you compare the last 3 months, sales are down 13% from Dec to Jan(not real accurate because they were pushing 2001 models in Dec), and down 5% from Jan to Feb. I seriously doubt March will be stronger than Feb. I would expect the number to come in at about 3236 or down 5% from Feb, at least. Wouldn't be shocked if sales dropped around 3000 though.
I haven't said what is the force that is causing sales to slide. I don't care what it is but I could speculate it could be one of the following or several of the following: the newness running off, issues with the car, market, APR, better alternatives, the list goes on and on. Car companies are companies, they are in it for the money which makes it easy to predict their next move, products, etc. Bad management though and no one knows what will happen even if they have the best mousetrap in the world.
Audi will have to sell 2,784 cars each month for the remaining year to hit their 2000 number. I couldn't find the 2001 number but presumably it was at least 10% better than 2000 which would mean they need to sell 3,092 cars each month for the next 10 months. The trend line suggest they won't be able to do this without some deep discounts on APR, relax on % over invoice or even under, free extended warranties, mass marketing, etc. I would say too that the dealerships are beginning to slightly feel an impending crunch right now, manufacturer will feel it in 30-45 days after. If the manufacturer doesn't drop APR or other, then 2003 A4 model could have something fairly significant, new and improved which would probably mean they could hit their 2002 forecasts. i am making an assumption that Audi execs are good, which most evidence supports that they are. BTW that is one reason why car companies don't start shipping new year cars on the 1st of the year or else their sales wouldn't trend well and they would have a hockey stick affect. It appears at glance there are bigger or just as big issues with sales of the A8,A6,and TT.
What does that mean to you right now? Pay no more than 3% max over invoice. Start at 2%. Remember, this is economics with the law of supply and demand dictating market conditions. A salesperson not making much commission on a car is just a variable condition not associated with supply and demand and should have nothing to do with any financial purchases unless commission is directly part of the sale price. Art dealers are an example. This would hold true too with level of service as that condition is inherent to the price/value perception of the car. Variables like service, service quality, friendliness are essentially add-ons or intangibles that are used to persuade your decision to buy but should not influence the price of the car. Remember, you are buying a car, service is included. It could influence where you buy it though. Service, friendliness and the like do not dictate nor influence the laws of supply and demand. Or as I like to say, service, friendliness, etc doesn't make the world turn, money does. In summary, you are not responsible for the income of a salesperson, if anyone is responsible it would be the car dealership which would then mean the car manufacturer in which case the car manufacturer probably needs to realign itself with perception, quality, price which translates eventually into what value they place with regards to salespeople commissions selling the perception and quality. Let's face it, being a car salesperson is not necessarily and easy living. If you want to help a salesperson out, then drive down to the dealer and hand them $500. In the big economic picture, you are actually doing a long term disservice to salespeople by being easy targets for them. Car sales industry needs massive reform but it will have to get worse for salespeople before the industry opens the gate to changes that will dramatically improve a salespersons life. Both sides of a car sales are sick and tired of the process and reform will begin undoubtedly occur sooner or later. In the old days, food was sold directly to the consumer in a very similar. Last time I walked into a grocery store I couldn't haggle over price.
If you were to wait on a car, you will likely see deeper discounts on APR in the coming months not just from Audi but from others as well. They have little choice otherwise they will slow their inventory channels thus increasing manufacturing overhead costs substantially.
The above numbers are a bit screwy because when I looked at the past press releases they didn't seem to tie completely from one press release to the next....Also they appear to mix up their press releases making it more difficult to paint a clear picture. Having said all that, this is only my humble opionion.
Does anyone know of a site with numbers for each month? Better yet would be the average sales price of the A4. Might need an Audi employee for that data though.
BTW, this little analysis all came out after a sales guy started jerking my chain...Sales were "way up" according to him. That is such a broad statement. While he was partially right on 1 account(year over year) he was wrong on several others.
03-15-2002, 05:58 AM
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The sales guy wasn't jerking your chain...
<b>Audi of America February 2002 Sales Report</b>
Audi of America, Inc. reported its all-time best February sales with a total of 6,125, up 4.1 percent from February 2001 results of 5,883. As a result of the strong sales month, Audi's year-to-date sales are a record 12,447, up 3.3 percent over 2001.
<B>The award winning, all-new A4 leads the month with sales of 3,406, up 33.6 percent versus last year's sales of 2,549.</b>
Hmmm...
Audi of America, Inc. reported its all-time best February sales with a total of 6,125, up 4.1 percent from February 2001 results of 5,883. As a result of the strong sales month, Audi's year-to-date sales are a record 12,447, up 3.3 percent over 2001.
<B>The award winning, all-new A4 leads the month with sales of 3,406, up 33.6 percent versus last year's sales of 2,549.</b>
Hmmm...
03-15-2002, 08:20 AM
#7
Too small/short a sample set. Wait 'til after tax season. Jan to May is slow season. Remember, if
the cars are not littering dealership lots, it means that demand is still good. You may be missing the fact that not as many A4s are being shipped, so not as many can be sold.
It takes at least 6 months for a trend to be a trend, and not a blip.
Keep in mind that Audi intends to send the same or fewer cars this year to raise demand relative to the number of shoppers.
You make some good points, but you are only seeing half the picture -the consumer half of the business.
As for salespeople making even less, this will ensure that there will be even higher turn-over and a lower quality ( if that is possible ) of person willing to work so many hours for so little. If you think Audi is bad, go a big Chevy or Ford store. There is rarely a salesperson who sticks around for more than a few months. They jump from dealer to dealer, looking for one that allows them to make more money. And since you suggest the dealer make even less money, they cannot offer any perks to keep good people. All the good Audi people will go to sell Porsche or BMW where they can actually make a living and have some dignity.
BTW. New A4 sales are setting records. Demand is high. If you want a killer deal on your A4, get everyone else to pay more, so they can pay for your discount ;-)
It takes at least 6 months for a trend to be a trend, and not a blip.
Keep in mind that Audi intends to send the same or fewer cars this year to raise demand relative to the number of shoppers.
You make some good points, but you are only seeing half the picture -the consumer half of the business.
As for salespeople making even less, this will ensure that there will be even higher turn-over and a lower quality ( if that is possible ) of person willing to work so many hours for so little. If you think Audi is bad, go a big Chevy or Ford store. There is rarely a salesperson who sticks around for more than a few months. They jump from dealer to dealer, looking for one that allows them to make more money. And since you suggest the dealer make even less money, they cannot offer any perks to keep good people. All the good Audi people will go to sell Porsche or BMW where they can actually make a living and have some dignity.
BTW. New A4 sales are setting records. Demand is high. If you want a killer deal on your A4, get everyone else to pay more, so they can pay for your discount ;-)
