Article / 05 August 2016 at 9:44 GMT

German car stories, part one: Audi mimics Apple

  • Volkswagen shares are still around 50% below their peak
  • VW daughter Audi wants to offer "in-car" services to customers
  • Pay for seat heating when needed instead of when ordering the car
  • Apple's iTunes and its "in-app purchases" as a blueprint for the car industry
Audi sports car
Fast and furious. Photo: iStock
By Clemens Bomsdorf

Germany's Volkswagen group has been in severe trouble since last year due to its building-in of a special software designed to manipulate emission test results (read my take on the issue as the scandal broke in fall 2015). 

Amid upcoming lawsuits and settlements, as well as the negative image linked to its cheating, VW's share price almost halved when the scandal was disclosed last September. Alhough the carmaker's shares are up again since then, they are still 50% off their peak. 

Volkswagen share price development since early 2015 (click to enlarge):
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Source: Saxo Bank

A few days ago, it was reported that VW might regain its position as the world's largest carmaker from Toyota (read a Bloomberg news piece about it here); this, however, is not entirely reflective of a rebound at VW as Toyota faces troubles of its own. 

Against these headwinds, however, the CEO of Audi – a part of VW (it is still independently listed, but 99.55% of its shares are held by VW) – has an idea. Like his emissions-fudging colleagues, he has an idea for a "special service". This time, though. it shall be legal, transparent, and designed to help customers and thereby help the carmaker boost profits.  

Audi executive management
Those guys might not look as hip as the top management of Apple, but the top management of Audi, led by CEO Rupert Stadler (in the middle), has Apple's success in mind. Photo: Audi
One could call it “in-car purchases” just as Apple's iTunes features “in-app purchases”. Instead of only allowing Audi buyers to choose extras when they order a new car, certain features could be built into the vehicles so they can be enabled later, on demand, and (of course)for a fee – just like Apple. 

(Interestingly Apple and VW shares have travelled similar paths over the last five years; see the chart below.)

Apple (pink) and VW (blue) share since 2010, monthly chart (click to enlarge)
Apple vs VW
source: Saxo Bank
“Imagine an Audi car seat with all features that can be ordered today as cooling, heating, massage and an indefinite number of positions. Our customer could then unlock certain features on demand and also only for a limited period of time and would pay by usage,” Audi boss Rupert Stadler told Auto, Motor und Sport (read the interview in German here). 

He also mentioned the possibility of buying laser lighting on an hourly basis during night trips, as well as services to find empty parking spaces.

As cars become more and more computerised it is often already nowadays the case that features are inbuilt, but not unlocked, for example because the customer did not order them. Motors also often have much more power potential than their stock form reflects, but maintain speed and horsepower limits reflecting the vehicle's sticker price.

In the same interview, Stadler stated that Audi has demanded too much from its customers by increasing the number of colour variants and other extras by far too great a degree. Customers simply had too much choice, he said. Let’s see if on-demand services will not just add to this oversupply of possibilities...

Audi inside
 Take a seat and buy a service. Photo: iStock

— Edited by Michael McKenna

Clemens Bomsdorf is a consulting editor at Trading


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