Here's a case where fewer sales can actually be a good thing. Audi just announced that the Q7 is a much bigger hit in Europe than it had expected. The problem is that it hasn't quite caught on as the company had hoped in the US. Because of sluggish sales, the US is only accounting for 30% of Q7 SUV sales. Audi had expected it to gobble up half of the units produced. But this actually represents good news for Audi, in a weird roundabout way.

With rising fuel costs, luxury SUV sales have been on a sharp decline Stateside. This had led Audi to keep an artificially low sticker price on Q7s in the States to keep them competitive and attractive to potential customers. Coupled with the weak dollar, this has meant American Q7s were barely breaking even. Sticker prices in Europe have been higher and are unaffected by the exchange rate. The unexpectedly high demand in Europe, however, means that the European-built model is actually making it profitable for them overall. As a result, Audi has even increased production 50% from 200 to 300 units a day. If this trend continues it will be easy for Audi to shift production capacity for the North American model back to the Euro version to meet demand in the old country.

[Source: Automotive News, sub req]


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