Could Audi See Sales Drop Next Year?

It’s been approximately six years since the average speed freak sales-rep swapped his company BMW car keys for those of an Audi. Now whenever you see someone in the mirror driving up your arse, the lights that are flashing you are invariably those of that menacing looking Audi and the greasy, slick back haired wanker driving it. It matters not a jot to them that you are already going as fast as the legal limit will allow, or that the driving conditions are not exactly conducive to driving around with your hair on fire.

But now the world is entering its fourth year of economic stagnation. In fact, if you’re living  in a eurozone country, chances are you might very well find yourself re-entering a recession soon. That’s certainly the projected forecast for here in the Netherlands. Whilst it’s largest next-door neighbour, Germany, recently announced low unemployment levels not seen since 1991, the Netherlands is experiencing unprecedented cuts to its welfare state and seeing overall government spending slashed. Given that 15% of the Dutch working population is employed by the Public Sector, a reduction in their spending patterns is enough to spin the economy back into a recession, having long lasting knock-on effects for the rest of the country. Which translates into Private Sector employers cutting back on perks and travel.

Aside from the basic salary and accompanying taxes an employer has to pay, the next biggest employee related items an employer typically spends money on is the pension scheme and employee perks (usually health insurance and company car). Pension contributions are largely driven in most Continental European countries by government policy, hence there is not much an employer can do to save money there. So the real area an employer can save money is by reducing salaries and reducing or eliminating the perks. Given that the clever companies will opt to retain top talent, leaving salaries untouched and taking a scalpel to the deadwood, that really only leaves one option. The company car.

Depending on which country you live in in Europe, this can be perceived as the slaughtering of the sacred cow. An unholy act that most unions and “works councils” will fight tooth and nail to leave unchanged and untouched. “How dare management think about taking away my car! But it’s my right, along with my six weeks of paid vacation.”

I’m not predicting a total drop in sales for Audi. Afterall, Russia, China and India’s economies are still buoyant (for the time being) with the nouveau riche chomping at the bit to own and drive a piece of German engineering. And there will still be enough greasy haired speed freak wankers left in Europe to buy the latest model to roll off the production line. But I am expecting that the leased ones already on the roads will probably see their leases being extended by an additional year or two, whilst the ones whose car policy has been impacted will probably revert to Golf GTi’s. Depending on the margins between brands, that could be good or bad news for Audi’s parent, Volkswagen.

 

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