By Matthew Keegan
German luxury make Audi is growing by leaps and bounds. In 2010, the brand sold more than 100,000 units in the profitable, but competitive U.S. market, its best year ever. Audi still trails its German rivals BMW and Mercedes, selling less than half of what they sell in the United States, but the brand is closing that gap.
Audi has a lot to celebrate besides record sales. At the 2011 North American International Auto Show in Detroit, the 2012 Audi A6 sedan won “Best Production Vehicle,” one of several awards certain to be bestowed on this stylish all-new sedan. The 2012 model goes on sale in spring 2011.
Booming Demand
Demand for Audi products has been a boom for parent Volkswagen AG, but it presents a problem for the automaker. That problem is U.S. assembly capacity which currently stands at zero. Volkswagen last operated an assembly plant in Pennsylvania, closing it in the 1990s as demand and quality problems dogged the operation. In spring 2011, an all-new assembly plant will go online in Chattanooga, Tennessee, but it will only build the Volkswagen Passat, a midsize sedan. No American production capacity means that Audi must import 100 percent of its vehicles unlike BMW and Mercedes who operate plants in South Carolina and Alabama respectively.
Until Audi brings production stateside, it will have to contend with currency vagaries between the euro and the dollar. Automakers who build in the United States have some advantages to those who don’t, avoiding currency fluctuation for select models while also building goodwill with Americans who prefer to purchase domestic models. Continue Reading
