2011 Audi A4 Quattro Base Sedan 4-door 2.0l on 2040-cars

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Volkswagen profit jumps as it warns of a cooling auto market

FRANKFURT, Germany — Volkswagen says its profits jumped 44% in the third quarter thanks to a more profitable mix of vehicles in its lineup but warned that global car markets are slowing more than expected and lowered its forecast for annual sales. After-tax profit rose to $4.42 billion (3.98 billion euros) as revenues rose 11% to $68.27 billion (61.42 billion euros). The sales margin of 7.8% exceeded the goal of 6.5-7.5% as vehicles bringing higher profits took a larger share of sales. The Wolfsburg-based automaker pointed to the headwinds facing the industry by saying that it expects "vehicle markets will contract faster than previously anticipated in many regions of the world." It said sales would be "on a level" with last year's record of 10.8 million vehicles. Previously it had expected a slight increase. The company said its profits would be in the lower end of its forecast range. Global automakers are facing a slowdown in sales amid disputes over trade and from pressure in the European Union and China to develop and sell low-emission vehicles that require heavy investment in new technology. Ford and Renault have issued profit warnings in recent days, while Daimler, maker of Mercedes-Benz luxury cars, lost money in the second quarter and is expected to outline a cost-cutting strategy for investors on Nov. 14. Volkswagen is leading the push into electric vehicles in Europe by launching its ID.3 battery-powered compact car at prices it says will make zero local emission vehicles a mass phenomenon. The company was able to increase earnings in the quarter despite an 18% rise in spending on research and development.

China probing German automakers over spare parts

The Chinese market has proven to be a boon to German luxury automakers. However, the way that the companies have allegedly been controlling their supply of spare parts has begun to draw the ire of the nation's government. According to insiders speaking to Bloomberg, officials from the country's economic planning organization have opened a probe into Audi, BMW, Mercedes-Benz and some Japanese carmakers over claimed price inflation and limiting supply.
Specifically, the investigation centers around two aspects of how the companies do business, according to Bloomberg. Investigators want to know whether the original equipment component makers are able to sell spare parts only to automaker-authorized dealers or if they are also available to independent shops. There is also the issue of whether the price markup on replacement pieces is too high. The tight controls could be partially explained by China's reputation for producing counterfeit parts.
Evidently, the investigators haven't checked parts prices at car dealers elsewhere in the world. At least in the US, paying more at the dealer for factory components just goes along with owning a vehicle. If evidence of price fixing is found, the companies could face fines the equivalent of millions of dollars, according to Bloomberg.

Believing in evolution | 2018 Audi S4 and S5 Second Drive

Sales figures for cars in America have plummeted. In a robust overall market, where vehicle purchases have reached record-setting levels, car sales fell by an incredible 9 percent last year alone. SUVs and crossovers are drinking their milkshake, now accounting for nearly two in every three purchases, a profound shift from cars' majority dominance as recently as 2012. Audi's all-new A4 sedan was a bright spot in the brand's car portfolio in 2016, increasing by 16 percent, but A6 and A8 sales fell 18 and 17 percent respectively, and the A5 coupe's sales tanked by a shocking 35 percent. Mitsubishi sold more than three times as many Outlanders last year as Audi did A5s. Were you even aware that Mitsubishi still sold vehicles in America? This trend is expected to continue, perhaps even escalate. But Audi refuses to give up on sedans and coupes. Credit the Teutonic monomania that requires a tit-for-tat escalation and diversification into every existing and invented market segment in which its rivals from BMW and Mercedes compete or don't. (An eminently sales-resistant five-door hatchback, the A5 Sportback, joins Audi's US car lineup in a couple months.) Whatever the instigation, we appreciate it. Cars are an intrinsically more efficient, and more fun, way to move people and goods around compared to SUVs. And Audi's new S4 sedan and S5 coupe prove that we live in a golden age of cars, especially enthusiast cars. At first glance, you might not notice much of a difference between the outgoing cars and these all-new models. Part of this is because the design is extremely evolutionary – though when you start with a pair of models that so elegantly nailed their respective categories, it makes sense not to smash the mold. Closer examination will reveal additional facets, creases, and muscularity in the revised designs. It will also reveal greater differentiation between the related pair, especially around the headlamps, grille, and hood, all of which are meant to be more sporting and exclusive on the two-door, a play to fit with its more sporting and exclusive nature. You might place your faith in other more magical ideas, but we're believers in evolution. The interiors of the cars are similarly evolutionary, and also far more similar. This is not a bad thing. Audi continues to excel in cockpit innovation. We credit it with reinventing the dashboard with the amorphously shaped LCD-screened Virtual Cockpit.