Audi raising vehicle pricing (again)

Audi recently raised MSRP to match BMW & Mercedes but Rupert Stadler said that the Volkswagen-owned luxury brand “would be prepared” to raise its prices next year if current cost trends continued, and depending on what its competitors did.

“If prices remain on this high level, the pressure for sure is increasing for everybody,” he said.

Carmakers rarely admit they are contemplating price hikes in one of the world’s most competitive industries, for fear of tipping off other manufacturers on their plans or losing market share. All face intense pressure from carbuyers to offer incentives on their vehicles, especially in slow markets such as the US.

The admission is especially noteworthy coming from Audi, a profitable premium brand seen by analysts as better-placed than most others to withstand tough markets because it pools many costs with its parent group.

Commodities rising prices has roughly doubled this year, adding to carmakers’ rising cost burdens arising from investment in cleaner ecological engines and smaller vehicles, and exchange rate-related losses on overseas markets.

“The real burden is not to be seen in 2008,” Mr Stadler said. “The big question is what is coming in 2009.”

Audi raised prices for some of its cars by between 0.5 per cent and 1.5 per cent earlier this year. BMW, the biggest producer in the luxury segment, raised its prices in the US, its largest market, by less than 1 per cent earlier this month. The pressure from rising costs is more intense for mass-market carmakers, which operate on thinner margins than luxury brands.

“If the industry is taking these head winds seriously, they will have to raise prices by 5 to 10 per cent,” said Arndt Ellinghorst, head of European automotive research with Credit Suisse. “But it could cost them 10 to 20 per cent of their volumes, and then we’re talking about under-utilised capacity.”

Like other carmakers, Audi is considering launching hybrid and electric vehicles, alongside other investments in new engines and technologies and lighter materials, to meet tougher emissions regulations.

Audi A3 TDI Club sport Quattro Concept

The A3 TDI Clubsport quattro concept is the German car maker’s latest effort to convince buyers that sports cars and diesel power can go hand in hand.

Audi has already unveiled a diesel version of its TT sports car, which can be expected in Australia by early 2009.

Hot on the heels of Audi’s R8 diesel supercar concept that's also expected to make production, the A3 super-hatch will be displayed at next week’s Lake Worther Tour in Austria with a 2.0-litre four-cylinder turbo diesel that delivers 165kW of power and 450Nm of torque to all four wheels.

The A3 Clubsport hatch will reach a top speed of 240km/h and sprint from 0-100km/h in 6.6 seconds, according to Audi.

Although that acceleration time is nearly a second slower than the range-topping S3, the six-speed-manual Clubsport quattro is significantly quicker (by 2.6sec) than the A3 Sportback equipped with an identically sized 2.0-litre turbo diesel engine.

The A3 Clubsport’s diesel engine is far more likely to make it into production than the car’s sheetmetal. Audi claims the 165kW turbo diesel already complies with Euro V emissions regulations that don’t come into effect until 2010.

The Clubsport quattro is 40mm longer and 36mm lower than the regular A3, and sits on huge, 20-inch alloy wheels. The front and rear tracks have also been widened (by 34mm and 46mm respectively) to give the racier A3 a bigger footprint on the road.

The front end is dominated by an even wider version of Audi’s trademark gaping grille, though the huge air intakes either side are never going to be described as subtle. The bi-xenon headlights are accompanied by LED daytime running lights.

At the rear, a conspicuous roof spoiler is inspired by the one that sits on Audi’s A4 German Touring Car race car. Two large exhaust pipes sit in a dark grey diffuser as an exit point for an “optimised exhaust system”.

The side profile is given a more muscular appearance with chunkier sills and bolt-on wheelarch extensions.

Underneath, Audi’s magnetic ride system – available on the TT and R8 and seen on the likes of Ferrari’s 599 GTB – allows the driver to stiffen or soften the suspension at the touch of a button.

Audi has fitted larger, carbon-ceramic brakes to the front for improved stopping power, although unusually the rear brakes remain the same as the production A3’s.

The A3 TDI Clubsport quattro’s interior is fitted with racing-style bucket seats, an open-gate manual gear-shifter, and a flat-bottomed steering wheel that includes the engine start/stop button.

The Audi Drive Select system that debuted on the company’s new A4 this year is also included. It allows the driver to vary a number of parameters, which on the A3 Clubsport include throttle response, exhaust sound, steering power assistance, stability control threshold, and damping.