ORLANDO, Fla. -- Audi of America will end its free maintenance program beginning with the 2007 model year, much to the distress of dealers.
The four-year/50,000-mile program, called Audi Advantage, was established in the late 1980s as a way to restore consumer confidence and jump-start the brand in the United States. Only a few auto companies offer free maintenance, but one of them is BMW, a chief rival.
"They are getting rid of it because of costs. Dealers feel it is a large advantage," said Tom Harper after the make meeting. Harper is incoming chairman of the dealer council and owns Harper's Porsche-Audi-Jaguar-Volkswagen-Infiniti-Acura in Knoxville, Tenn.
Audi still will provide some free service in the first year of ownership.
Dealers want Audi to consider a modified program for repeat customers. "It is important to those who have a second or third car," Harper said.
There's no doubt some loyal customers may be disappointed, said Johan de Nysschen, executive vice president in charge of the Audi brand.
"There is that danger, I have to acknowledge it," he said.
But Audi needs money to fund a proposed increase in dealer margin, de Nysschen said.
He said he is committed to returning Audi to profitability.
"If we move into the environment where the customers are effectively not locked into the service by virtue of Audi Advantage being standard on the car, it will mean that we will have to work a little harder to attract and retain the customer," de Nysschen said.
Audi research shows that while the offer is valued by customers it is not a key factor in the purchase decision, he said.
On the warranty side, Audi said it will change policies on retention of parts, no longer requiring dealers to hold them for three months. Dealers will have to hold parts only for recently introduced vehicles.
Audi will pay to have parts returned to headquarters if a fault or problem is detected. Dealers previously bore the cost.
Dealers, especially those funding the expansion of their stores, told Audi they want more cars, de Nysschen said.
Audi announced that sales objectives are being changed from a preset goal for each dealer to a traditional turn-and-earn program based on how many cars each store sells.
You may e-mail Diana T. Kurylko at [email protected]