Has Audi Given Up On Making Cars?

Posted on Jan 7, 2015 in Editorials | 1 comment

I was driving along the other day, and I found myself behind an Audi A6. A new Audi A6. A brand-new, midsize, luxurious Audi A6 sedan. And I thought to myself: When was the last time I saw one of these things?

This wasn’t always the case. Back in the late 1990s and early 2000s, you saw the Audi A6 everywhere. They had that cool rounded design, and they were the dream of anyone who had an A4, or a 3-Series, or a C-Class. The Audi A6: The car that says you’ve made it — and that you need all-wheel drive.

So what the hell happened after that?

In 2005, Audi redesigned the A6. While sales briefly spiked, they didn’t stay up for long. By 2009 and 2010, U.S. sales were less than a quarter of their 2002 totals. A recent redesign helped, but it didn’t restore the A6 to its former glory. These days, Audi sells between 22,000 and 24,000 A6s a year in America, down from nearly 40,000 in the late 1990s. And it’s worse in Europe, where sales reached 126,000 in 1998 and 139,000 in 2006, only to fall to a steady 85,000 per year in the last few years.

I’ve always assumed that the A6 was losing sales to the smaller A4, which continues to grow larger and more family-oriented with every passing year. So I checked A4 sales figures — and guess what? While European sales peaked at 260,000 units a year sometime in the early 2000s, the A4 is now down in the range of 125,000 European sales per year. It’s just as bad in America, where A4 sales once easily cracked 50,000 units (in 2003) and have steadily declined each year since, despite redesigns in 2005 and 2008, to the current state of around 34,000 annual sales. That may not seem like a huge drop, but it’s a decline of more than a third from the boom times. That’s a big deal.

So, you might be wondering, if all the once-popular Audi models are going down the tubes, how the hell is this company not bankrupt?

I’ll tell you how: SUVs.

The Audi Q5 was released in calendar year 2009, right in the middle of the A4’s long, vast decline. Its first full year on the U.S. market, it sold 23,000 units. The next year, 25,000. Then 29,000. Then 40,000. Then 42,000. This year, they’ve already moved 46,000 Q5s in the first eleven months of the year.

Naturally, the Q5 isn’t the only Audi SUV that’s having a great time these days. Released in 2007, the Q7 sold 21,000 units in its first year on the market — and after a few rough years around 2010, facelifts and new engines have brought it back to 18,500 units in 2014, despite a fundamental design that’s seven years old. A new Q7 is coming this year, which should help to boost sales even further.

And then there’s the Q3, which didn’t even exist in the United States until about 18 months ago. This year, it has already shifted nearly 12,000 units through November, and those numbers only seem to be growing as the “subcompact luxury crossover” segment heats up rapidly.

And this leads to my question: Has Audi given up on making cars?

Of course not. The very premise is stupid. But let’s be clear: It appears that Audi, notoriously slow to respond to market demands and changing times, has very quickly seen the writing on the wall in this particular case. Demand for cars is down, so they’ve made SUVs. Many SUVs. Several models and hundreds of thousands of units globally. The company has clearly put its cards on the table, and its hand consists largely of SUVs.

This isn’t the case with rival automakers. Last year, the BMW 3-Series enjoyed its best U.S. sales year in more than a decade. The C-Class is in the same boat, with 2012, 2013 and 2014 going down as its best sales years in recent history. It’s even true of the aging E-Class, which has recorded 60,000 or more sales in every year since 2010, despite barely being able to crack 50,000 sales in the decade earlier.