Volkswagen & Audi JACKED UP Prices, Now THIS Happened | Episode 963

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Now, the story for today that we're going to start with is Volkswagen and Audi have jacked up their prices.

Now, this has happened.

Two pieces of data to start today's conversation off with.

First things first, yesterday we got the new vehicle inventory data from Cox Automotive.

We did not spend a lot of time looking at specific automakers who were struggling.

This is Market Day's supply, a metric that we look at often,

how many days it would take to sell all available inventory.

The higher this number is, the more desperate a dealer is,

and the more pain the manufacturer is in.

Look to the far right, Volkswagen has a 121 days supply of inventory,

Audi has a 133 days supply of inventory.

We know both of these brands are struggling mightily to sell their vehicles.

Now, in today's automotive news, we have VW said to delay investments

amid financial uncertainty, Audi US production at risk.

This comes on the heels of other reporting that showed that VW

may no longer be solvent after a year or two because they don't have enough cash on hand.

They jacked up the prices pops, now they seem to be paying the price.

What's going on with VW and Audi?

Well, you get to a certain point where you price yourself out of the market,

where you kind of sort of abandon your customers

and you raise your prices enough that your customers can no longer

come along for that ride.

And this is a situation that Audi definitely finds themselves in.

And in many cases, Volkswagen as well.

And even a third brand under that umbrella, Porsche.

So we're seeing a situation here where increased prices

have resulted in a slowdown in sales,

which has a negative cash flow impact.

And when you add tariff, and I know people hate when I say the word tariff,

but it is the reality of the situation as these manufacturers

try to eat as much of the tariffs as they possibly can

in an effort to try and keep the prices down.

It creates a situation where they no longer have the operating cash on hand

to be able to do the things that they thought they were planning on doing

because they just can't risk spending the money.

Which, to be honest, actually could be a good thing

because they have an oversupply of inventory right now.

So you start, you know, you lessen investment, you decrease production.

Ultimately, hopefully that gets them back in a position where they have

a good supply demand next.

But that's the thing, Dad. There's not enough people buying these vehicles.

And obviously, should come as no surprise.

I want to go to the Car Edge Car Search today and look at a few examples live

and see what we can find.

But yeah, I mean, it is interesting, Dad.

They actually might benefit on the other side of this

because they have produced too many expensive vehicles that people aren't purchasing.

Well, and the real dilemma for Audi is that, you know, most of their vehicles

are not built here, if not all of their vehicles are not built here.

So they want to try and mitigate the tariff expense

by building a U.S. facility, manufacturing facility,

and then at some point actually being able to export some of the vehicles

that they would be building here in the United States.

They don't have the money to do it.

Okay. They are, what was it, 11 billion euros short

of where they had hoped to be at this time.

So initially, when they said they wanted to make the investment

in a manufacturing facility here in the United States,

they said, and we're going to need some government assistance.

Well, now they don't even have the money beyond whatever government assistance

they would need in order to build the facility.

So this has major ramifications for the Audi brand here

for being able to keep the costs of the vehicles down

because they won't be able to build them here.

And so this is one, I think, one of those unintended consequences

of actions that occur where we could actually see the death knell

of a somewhat popular brand in this country.

It is interesting to think that, yeah, Audi, I mean Volkswagen in general

is in a lot of financial trouble, and we're going to look at some sales data here

in just a second.

Audi is the brand that seems the most at risk of, yeah, to your point,

like potentially not being able to operate here in the United States.

Now, to be clear, the situation at Audi is not nearly as bad

as what we've seen at Nissan and some usually things like that,

but you're onto something here.

I mean, what was it, the Audi Q5?

We saw a year over year price increase of over 15%.

I mean, there are going to be a lot of challenges if you're Audi

and Audi dealers here in the United States versus BMW,

Mercedes-Benz that are facing different challenges,

but not the same, like Audi set up really poorly to succeed.

Well, here's what you have to realize when it comes to German luxury brands.

Okay, the big three are BMW, Mercedes-Benz, and Audi,

but Audi is so far behind the other two, you know,

they're like well in the rear view mirrors of Mercedes-Benz and BMW,

especially here in the United States.

So that's not to say that Audi can't survive.

They just might not continue here in the United States

if they can't figure out a way to make their vehicles more cost-effective here.

Obviously, you know, I think the Q5 is built, if I remember correctly, in Mexico.

So, you know, everybody is waiting on whatever trade negotiations are going on,

but the added tariffs for bringing vehicles in from Mexico

are negatively impacting Audi and the price of their vehicle.

So it's hard to be able to predict, but the prediction would be

that if sales continue to decline, as prices continue to rise,

that's not a typically a recipe for longevity.

I want to do a quick example. Let's do it here, Dad, on the Car Edge Car Search,

and then we have to thank the sponsor of today's show, our friends over at DeleteMe.

I'm just looking at new Audi's for sale back on the Car Edge Car Search.

I've got the zip code to Scottsdale, Arizona, and just the first row of vehicles here.

This is some of the challenge that Audi's facing.

The new A5 2025, 189 days on the market, 195 days on the market, 158 days on the market.

Each of these are $55,000 sedans, which we know is a segment of vehicle here in the United States

that is not performing well, 196 days on the market, 160 days on the market,

175 days on the market.

I mean, it's taken till the third row of vehicles just to find one under 90 days

at Audi North Scottsdale, Dad.

So, I mean, it's pretty damning just looking at this initial page of vehicles.

And let's click on the first one here. Let's come back up. We'll click on it.

And let's see what we've got. Invoice price, MSRP, discount range.

I mean, holy cannoli, man.

So Audi dealers in the Scottsdale area have only sold to what trim level was this

of the premium plus trim level A5, but 75 are currently for sale.

That's unsustainable. That's entirely unsustainable.

Or you can sustain it for like six years.

Yeah, because you have six years worth of inventory, but no one's buying them.

No, this is, I mean, this is really damning to look at if you're Audi.

And this is one of the reasons why you keep increasing prices,

whether they're the result of tariffs or not.

You keep increasing prices. You can't, you can't sell them.

Like they just can't sell them. And this is a perfect example of that.

You know the worst part of this?

I believe there's three Audi dealers in the Phoenix metro area.

And two of the three are owned by the Penske organization.

This is one of those two.

So I would imagine the other store in Chandler is struggling just as mightily.

So it's difficult.

Our community, however dead, not struggling.

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Dad, we had a thoughtful contribution come in.

I want to pull this up on the screen from Orin.

Thank you, Orin.

Cheers from Houston.

Thanks for the great content.

That's a nice Friday mantra.

I like that.

That is very nice to see considering the number of comments

that I see different days saying crap.

So, you know, it's really funny.

I don't know if you spend any of your quality time looking at the comments.

Of course I do.

Yeah.

Well, you shouldn't because you've got bigger things to do,

but it is just amazing how the vast majority of people appreciate

what it is that we do and others look at it and just go,

oh, you're all just doomed.

You know, it's not doom and gloom if you're just reporting on facts.

If that's the conclusion from the facts,

then that's the conclusion from the facts.

And, you know, it really is a different topic every day.

Let's keep it moving, Bob.

I want to do, we did Audi.

I want to look at Volkswagen as well.

And I'm thinking about Volkswagen,

especially through the lens of their EV push.

They got the ID buzz.

They got the ID four.

So we did Audi before.

Let's do a Volkswagen.

So now we're looking at all new Volkswagen's for sale nationwide,

of which there are almost 81,000.

Holy cow.

There's a lot of inventory out there.

We've got the Atlas of 2026.

Let's look at the 25 Jetta here.

All right.

This is their, like, mass market vehicle.

I think the Tiguan probably is their best seller,

but the Jetta right here, scroll down.

We had no sales on this particular trim, the SEL,

but this one's been 194 days on the market.

Let's see.

What about the sport trim?

My goodness.

That store is directly across the driveway from the Acura store

that I was the new car manager at.

So here we go, Pops.

This is, you know, a very, very, very affordable vehicle.

We're now looking at a Jetta Sport dealer invoice price on this,

$24,927.

There's 128 days supply.

So this is VW with their most mainstream option,

$25,000 vehicle.

Yet dealers have only sold 13 of these and have 37 for sale.

So we're talking about Audi being in a difficult position.

Even this is surprising.

128 days supply on a $25,000 vehicle.

That's not what you would expect.

You know, I keep harping on the fact that we need more,

less expensive vehicles.

And I would certainly think in today's world when you look at the numbers

that a $25,000 vehicle would be considered on the lower price side.

Definitely.

And every time we look at vehicles in those price points,

it seems as if they're sitting.

So is it that the public is just so enamored with the higher price

vehicles, SUVs, pickup trucks, whatever, that when there are affordable

choices for them, that they just refuse to pull the trigger?

I don't know.

I mean, you know, we looked at the Versa numbers.

It's one of the slowest selling vehicles in America.

And it's lower 20s as far as price points concerned.

And it just makes you wonder, even though they're inexpensive,

is that really saying that the people who should be able to afford to buy those

vehicles don't find themselves thinking that they can actually afford to buy

those vehicles at the moment?

All right, people.

Serious question time.

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Let's look at the EV part of the equation, Dad.

Let's do the ID for it.

The buzz is just too crazy for me.

I'm interested in, no, we haven't had any sales.

We haven't had any sales in the last 45 days in the Phoenix Metro for ID4s,

which makes sense because there's no longer the tax incentive.

So not too surprising to see that.

I am curious about the Audi EV selection as well.

There are, wait for it.

There must be a ton of the EVs.

There's 822 new EV Audis out there, and we know these things are boat anchors.

They're not selling 134 days on the market, 201 days on the market, 211 days on the market.

I mean, this is just like, they're screwed.

I mean, these dealers are screwed.

Anyone buying these things knows that they have more leverage than ever before.

And they might have leverage, but looking at the dollars and cents situation that VW is having,

and Audi is having, the customer might have leverage,

but the manufacturer doesn't have the money to put towards incentives in a large enough manner

to be able to move the needle.

If you're already 11 billion euros short of where you need to be,

where are you coming up with the money for incentives to move the product that is acidic?

And that is what becomes a conundrum for these manufacturers.

We know there was a quarter last year or this year where 99% of Nissan's profits

were eaten up by the incentives that they had to spend in order to get people to buy the crap.

So, at a certain point, if you no longer have the cash flow available to underwrite incentives,

what do you do?

How do you move this stuff?

At a certain point, it's going to fall on the dealers to take even less profit or no profit

or losers on these vehicles to move them, but that's not sustainable either.

Yeah, I completely agree.

Dad, we've got from Matthew a very kind contribution.

Thank you, Matthew.

Dilemma at Audi is they rested on their 2010s laurels.

They haven't built a compelling car since instead shifted production of old crap to pocket dollar chickens roosting.

I don't know what that last part means, but I do think he's onto something.

The product just hasn't kept up, and obviously the price points have gotten higher and higher.

You know, I think they really leaned into electric vehicles much more quickly and much more significantly

than some of the other VW brands, and I think that is coming back to haunt them.

You know, you look at the price of their EVs and they're astronomical,

and they've always been astronomical.

Obviously, they're not the EVs of choice for the buying public out there,

and then we know in October EV sales kind of crashed.

Of course, yeah.

So if you weren't the EV of choice before the crash, you're definitely not the EV of choice during the crash.

For sure.

But to be clear, and I'm going to pull it up on the screen,

top 10 slowest selling vehicles in the United States right now,

two of them are Audi's.

They're not EVs.

They're the A4 and the A6.

So, you know, it's a product challenge across the board,

whether it be powertrain or the fact that they made sedans that people don't want to buy, et cetera.

I will pull up one more comment here from Orange Rubber Ducky, and then we'll switch gears.

Last thing I saw, Volkswagen has a zero down, zero dollar, excuse me, zero dollars down, 0% interest rate,

zero something, zero something.

Is it actually good for the buyer, or is it just to look good and help them sell vehicles?

So maybe we are starting to see Volkswagen pick up on incentives a little bit, Bob.

Maybe.

I don't know.

You know, typically, when they've done things like that, it's on a lease, and it's zero down,

and, you know, like nothing do at lease signing, allegedly, until, well, you go to sign the lease,

and then their stuff do at lease signing.

But that's typically when they do their zero down bit.

Yeah, I think you're right.

I think you're odd to something.

I think you absolutely are.

Okay, shall we switch gears then?

It's a Friday, which means we are doing our community Q&A.

Our dear friend, Space, here in the chat, is really our community champion over there.

He is supporting us, Mario.

We appreciate it very much.

Well, Dad, we've got a couple questions this week, so why don't we go ahead and answer them from Will and Elizabeth.

Is it better to buy a new car now with Black Friday pricing or wait until the end of December for end of year savings?

I'm in no hurry.

Let's talk about this, Dad.

Black Friday versus the last week of the year.

What it depends on, and I think this is a point that I'm going to harp on moving forward.

Here's what it depends on.

If you find the vehicle that you like and you've done your market research and you've been able to find it at a price that is acceptable to you and it is available to you,

rather than trying to figure out exactly when the bottom of the market is going to be,

just go ahead and buy it now because most people miss the bottom of the market.

Normally, people mistime it.

So if you buy it where it was close to the bottom of the market, you're doing great.

If you happen to be lucky enough to time it that you buy it at the bottom of the market, good for you.

But I can't imagine that if you can find a good price today that it would be that significantly lower the last week of December.

You might have limited availability as to what is left and you might have to settle for something that wasn't 100% what you want.

My dad and I have different answers to this one.

Appreciate your perspective, Pops.

My answer is this, if you have a vehicle that you need to trade in as part of your deal, get it done now.

Yes.

If you have no trade in, feel free to wait.

Next question.

When looking for a new car, several manufacturers had really good interest rates but unwilling to negotiate out the door price.

When I asked of what we could bring down the price, what we could do to bring down the price,

I was told by the dealership that I either take the lower APR or negotiate the price.

I could not do both.

Is this the new norm?

What an interesting question and experience.

Okay.

Also, go ahead one second.

Sorry, I apologize.

For those of you, I'm done.

We tried it.

We tried doing the two streams, one horizontal, one landscape.

We'll get rid of it.

If you go back to Car Edge Live, if you click on the channel, you'll see there's two streams.

Apologies.

I'm done trying it.

My bad.

Sorry, y'all.

Back to the question.

Sorry, Pops.

I'm going to put this as nicely as I can.

Since the special interest rate is underwritten by the manufacturer, one thing has nothing to do with the other.

Okay.

There's nothing that says you can't or the dealership can't discount the vehicle from MSRP and still have you qualify for any special interest rates that are available.

Now, sometimes there could be an either or incentive, and the incentive could be you could either take a rebate, which can be applied to help lowering the price of the vehicle, or you can take the cheap interest rate.

Those are where you can't combine the two.

But even if you take the cheap interest rate, it doesn't mean that the dealer can't discount the selling price of the vehicle.

So, to a degree, one has nothing to do with the other.

I got a cop car going by, so I was trying to stay on mute.

But yes, I completely agree with you, Dad.

They're just doing some gamesmanship here.

Yes.

Obviously, you can negotiate out the door price.

I don't want to say obviously, you can negotiate out the door price, and then the rebates or the rebates.

Yes, exactly.

It is what it is.

Thank you, Space, for getting that question there.

We've got another one, Dad.

Final one here from Rick.

Toyota seems to always play hardball with their prices.

They don't give you a lot of wiggle room from the manufacturer with any rebates.

Why is that?

This is a great question, Dad.

Well, I would think the why is that is because they have the lowest day supply of vehicles available.

You know, they have mastered the technique of matching inventory levels to demand levels.

So, their supply doesn't seem to outpace the demand, and when that's the case, then the

dealers are not quite as compelled to negotiate discounts because, well, the person behind

you will probably buy the vehicle.

That's not to say that if you work at it, you can't get a discount.

You probably can.

It's just probably not going to be to the same degree that you can get, say, on that

Audi that has 133-day supply of vehicles as opposed to that Toyota or Lexus that has

a 38-day supply of vehicles.

Google search, carriage, fastest and slowest selling cars, and you'll come to this page.

Slowest selling cars, if we were to do, and in this we have all the rebates, you could

literally click on any of these and you could see the current incentives and offers for

the slowest selling vehicles.

Yes.

We can just click right here, fastest selling.

So, now we've loaded the fastest selling cars in the United States.

The entire list is Toyota and Lexus.

So, do the question of why do they not offer a lot of incentives?

They just have no need to.

Because their sales outpace their supply.

The simple answer is they don't have to.

They don't have to.

Yeah.

Why reach into their pocket to try and get people to buy their products when people are

already paying sticker price, right around sticker price?

Dealers don't even have to discount that much.

To be clear, with our car buying services, we've been able to get some really great

Toyota deals recently.

I love looking at it.

We can do that next, actually.

If you come to caredge.com, you click on the research up in the top navigation.

Let's scroll back up here.

See what others paid?

You can go ahead and click on that.

It'll open up our verified prices.

Let's look at Toyota.

You can see community submitted car deals.

So, what other members of our community have been able to do, which I think is a really

awesome functionality.

You can see exactly what other community members have paid for vehicles.

Or, you can look at just concierge deals.

And you can see, look at these tons of deals, Dad.

Toyota's.

What do you have?

You know, $6,000, $7,000 in savings.

It does exist.

Yes.

But it's more so against there more.

I mean, discounts like these you're not going to see on.

Let's see here.

A Camry?

I mean, Crown Signia.

All right.

Big discount.

Toyota Highlander.

Decent discount.

Wow.

But it's some of these other ones.

Crowns, Tundras.

You know, those are the ones that you're going to see the bigger discounts.

We keep going.

We're going to see smaller, yeah.

Camry Hybrid, $3,000.

That's still massive.

Yeah, it really is.

But you know, we're not seeing what you're going to see on like a Jeep Grand Wagoneer

or something like that.

No, you're not going to see 20% off.

No, you're definitely not.

From David here.

Good to see you, David.

Appreciate the contribution.

Hey, guys.

So far, my 2025 Pro S Plus is perfect.

All right.

Glad to hear it.

Yeah, to hear it's working out well for you, David.

Really, really grateful for the contribution.

We had earlier in the show from Gabriel.

Ford Bronco Raptor.

Are you planning in December or wait until January 2026?

I think you got the more leverage in December, don't you think, Pops?

Yeah, if they're close to a sales goal, I mean, it's still a Raptor.

And Raptors tend not to get discounted as significantly as some of their other product.

But yeah, I would think in December you should be able to, during the feeding frenzy that

happens that somebody might fall asleep at the switch and actually allow you to get a

good deal.

Yeah.

Again, thinking this fourth quarter very much buyers market, we have seen even a softening

amongst the specialty vehicles like the Raptors and things like that.

So definitely more opportunity today than there has been in the recent past.

Again, folks, if we can help you out with anything, caredge.com, go to caredge.com, check out the website

in caredge.com, excuse me, concierge, learn more about our car buying service.

And like I said earlier in the show, get a free consultation with our team to see if

it might be a good fit.

Pops, that's all I had for today's show.

Next week, we won't be doing the two streams with the different formatting lesson learned.

I tried it thanks to the streaming platform we use.

They give us that functionality, but it's a total pain in the butt.

It actually makes more confusing for everyone, so sorry about that.

So lesson learned there.

And then, Dad, I'll be Monday live from Los Angeles, which I can't wait to do.

Yes.

Well, that's because I believe you have a lung cancer foundation of America fundraiser

to go to on Sunday.

Yes, I do.

Yeah, for those of you that are not familiar, I've recently joined the Lung Cancer Foundation

of America, working with that team.

So really fun to support that effort and can't wait to be out there doing this fundraiser.

Well, good luck with that, young man.

Hey, feedback to the streaming platform we use.

Yeah, I didn't like the two streams.

So there you go, StreamYard.

Love using your platform, but you've caused a great deal of headache over the past three days.

So lesson learned.

Folks, we're back on Monday.

Dad, I love you.

Enjoy the weekend.

You're looking shirt today, too, by the way.

Well, thank you.

I think very highly of you as well.

All right, folks.

We'll see you on Monday.

Love you.

Bye.

100-Year Tour.

We'll see you on Monday.

If you like the show, please take a moment to rate, review, and subscribe.

It really does help the show to grow.

Thank you for listening.

Volkswagen & Audi JACKED UP Prices, Now THIS Happened | Episode 963

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