Audi’s 200,000 Car Sales at Risk

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Accusations that some Audi vehicles are part of the Volkswagen effort to dodge emissions standards add to the problems the huge German car company has from its mid-level vehicles. Luxury brand Audi’s U.S. sales run close to 200,000 a year. Some portion of those sales have risk because of disclosures about the engines that power them.

The federal government’s list of targets has expanded to the 2016 Audi Q5. The 2016 Audi A6 Quattro, A7 Quattro, A8 and A8L could join the list as well. Volkswagen disputes these model’s problems. The government trumps manufacturer claims, almost always.

Audi’s sales gains in America probably have come at the expense of Mercedes and BMW. The competition might include Ford Motor Co.’s (NYSE: F) troubled Lincoln and General Motors Co.’s (NYSE: GM) Cadillac. Japanese manufacturers have vied for market share during the past two decades, led by Toyota Motor Corp.’s (NYSE: TM) Lexus, which based on several research studies can claim to be the best-made brand of any kind sold in the United States.

Audi has changed its competitive position during the past decade from a four-wheel-drive luxury alternative to a mainstream luxury brand that numbers four-wheel drive among many additional features. At the same time, some of its competitors make four-wheel-drive cars. Audi might not have suffered problems based on a niche position, if it had not done so well in the broadening process. Model by model, it goes head to head with every car in the Mercedes and BMW lines.

Early indications from Volkswagen sales show that consumers have sharply curtailed purchases of diesel models, which has caused dealers to offer discounts into the thousands of dollars. The stigma now has passed to its gas-powered versions as well. Audi may find similar products as the federal investigation deepens. Years of repositioning wasted? Highly likely today.

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