Audi favors Diesel over Hybrids for the Q5 & Q7

Audi of America chief Johan de Nysschen is hoping plans for the hybrid variant are pushed back at least two years in the hope the dollar gains strength so as to squeeze some profit out of a vehicle with a pricey powertrain.

In the case of the Q7 TDI, the launch is tentatively set for February 2009, but its model year has not been decided. In an interview with Car and Driver, de Nysschen says his preference is that it be denoted a 2010 model, but to qualify, production cannot start until after January 1, 2009, which would push back the sales date to next March at the earliest. Audi would prefer to begin assembly at the end of this year to ramp up supply, but such action would make the crossover a 2009. De Nysschen says the decision will be made within weeks.

As for the outrageous Twinturbo Q7 Diesel V12 engine is slated for sale in Europe in the second half of the year, de Nysschen says the business case to make it available in 50 states is a hard one to make. The concept, with 500 hp and 738 lb-ft of torque may make the hearts of enthusiasts flutter, but Audi needs to be able to support it in the market and the reality is, “there probably is not enough volume for it to come.” When you amortize the cost over the projected volume, it adds up to a very expensive vehicle, he says. “It would have to be a $130,000 car.”
Putting the V-12 into a production R8 would be less price sensitive, he argues, but he questions whether the hot sports car needs that many engine derivatives.

What de Nysschen would like to see is the new Q5 SUV with a diesel for North America. The all-new Q5, and no formal decision has been made for the diesel in the U.S., de Nysschen says.

Clearly a proponent of oil-burners, de Nysschen says the 3.0-liter diesel could also go in the A4, the A6, and even the A8. A four-cylinder mill could also go in the A4, as well as the A3. He says a diesel A4 for North America is “under consideration.”

As for Audi’s hybrid strategy, de Nysschen says he wants to delay the launch of a hybrid Q7 as long as possible—if not indefinitely—given today’s currency exchange rate and the low projected volumes for the vehicle. The price premium of the hybrid under these conditions would negate the savings to consumers, he says, as well as eliminating any profit margin for the automaker.

As a result, “I’m not pushing engineering to hurry up,” he says, and he is not pushing for hybrid versions of any additional Audi vehicles at this time. “We don’t need hybrids for all segments for Audi in the U.S.”

“I’d like to see hybrids pushed out two more years.” Like many German carmakers, Audi sees diesels as a better option in the U.S. than hybrids. But the automaker also recognizes the well-entrenched perception by American consumers that hybrids are a better solution.

And when Audi is ready to introduce a hybrid, “the Q5 would be a better volume hybrid,” he says. Technically the switch would be easy. “What we can do to the Q7, we can do to the Q5,” de Nysschen says.