German Car Zone

I have no problems with Audi plans ... Yet I just wander where are the limits of going down-market.

Audi A0? Smart ForOne? Mini Half?

I think i understand where EniLab is comming from.

For a premium brand like Audi, going downstream with a lower priced product is a very risky investment. Not only do you risk cheapening the brand, but the profit margins in the lower segments are extremely thin. If the investment doesn't work out, then the company simply wastes a lot of valuable resources i.e money. See the Smart ForTwo and A2.

I know that BMW has tried to offset this risk by offering "lower-priced" products that offer something special. The MINI has its worldwide nostalgic brand following, and the 1 Series has rear wheel drive. These mentioned vehicles have that special something that generates value for consumers. Hence the strong sales for MINI and 1 series.

If Audi were to go down this path with the new A2, it needs to offer something unique and different, otherwise it'll just become another "me-too" car like a Polo or Ibiza or Astra.

Having a high quality interior is a good start, as is having some desirable styling. But remember that if Audi were to share the same platform with the Ibiza or Polo then it would have to develop this car at a cost, and it could compromise quality and restrict styling.

I agree that the A1/A2 will lack that heritage, that the Mini has (and the Mini is its main rival).
But the A1/A2 will distinct itself fromt he rest of the 150hp+ cars in the A0 segment with higher quality, the typical Audi design and a sporty appeal.

As for the lower profit margins in that segment: well, looking at Mini, I doubt it. If you have a distinct quality (listed above) I think demand will be pretty big and therefore prices and margins can be kept realitvely high.

We are all guessing a lot, since there is no picture from exterior/interior of a close to production A1/A2 obviously, but if Audi can build it in a way that is desirable for the customer the car should become a success

I can assure you that the profit margins are VERY thin in the lower segment. The Mk1 MINI was profitable, but it only became profitable well into the car's lifecycle.

I doubt Audi would set a high price for the next A2- It would have learnt from its mistakes with the Mk1 A2.

If a premium company is going downstream (sell lower-priced cars) the best way for the investment to be profitable is to expand the lineup horizontally i.e derive variants off the core model to spread the costs. Like with the MINI, creating variants such as a convertible and Clubman out of the 3rd door, the costs of development can be spread throughout an entire model range.

It's good that Audi will share a platform with the Seat and possibly the Polo since it would go a long way in reducing cots.

Bla bla bla

I just want to give my last point on the A1/A2 (for this hour ):
The car has not been decided to be build so far, so don't get too excited just yet.

Ok since the title is somehow missleading let me get a few things straight.

VW is not using "platforms" anymore with the old meaning of the term. Today's "platforms" are "flexible" meaning that Audi can take the work VW has done for new Polo (and Ibiza) and adjust it to match it's own specifications.
That means in other words that the wheelbase , the height, or the lenght of A2 might not be the same with new Polo if Audi decides so. Furthermore like i said above the rear suspension is not going to be a torsion beam like in Polo but a multi link so the A2 will be upmarket. Also the buld quality will be in the same high standards as any other Audi.

Volkswagen never used the plattform-strategy in a way that all cars on one plattform had the same bodystyle.
The corporation has switched to a modul-strategy, which means its more flexible indeed. For example, the Eos has got engines and gear boxes from the Golf, bodyparts from the Passat, suspension I don't know about and, of course, its own roof.
The A1/A2 will be mainly based on the Polo plattform though. Maybe suspension and bits of the interior will be from the Golf/A3 plattform, but most of the body/engine will mainly be Polo/Ibiza/Fabia.

Still, the question remains if they are really going to do it, since the car has not been announced yet.

According to German magazine "Wirtschaftwoche", Audi A1 got the green light for production which will start in 2009.

Note that the name of the car has been reported to be A2 from some other sources.

German Car Blog has more details: http://www.germancarblog.com/2....html

So until then, we'll keep on talikeg ?!
The waiting is going to kill me.

Yep, it seems like they are going to build it.

My Info was obviously surpassed very quickly