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Audi Inventory Down after Strong First Quarter

Strong sales may be a double-edged sword for Audi. The German luxury brand witnessed its strongest first quarter ever, but the boon in sales has the company facing a shortage in inventory in the United States -- a key market for the automaker.

"We are short of everything," Johan de Nysschen, Audi of America's president, told Automotive News. Normally, Audi has around a 60-day supply of vehicles, but as of April 1, it had a mere 29-day supply of vehicles -- well below the industry average, and severely crimping sales.

The vehicle shortage is caused largely by Audi's decision to cut its 2009 U.S. vehicle allocation by 6000 units, thanks in part to the economic meltdown and a massive drop in new car sales. What wasn't expected, however, was for sales to pick up in December and remain strong through March. Audi managed to sell 6000 more vehicles in the first quarter of 2010 than it did during the same timeframe in 2009. Audi plans to increase its U.S. vehicle allocation by 3000 units, but it will take some time to import the vehicles into the country.

De Nysschen says inventories of every Audi product -- from the A3 to the R8 -- are at critical levels, with supplies of both the Q5 and Q7 extremely limited. First-quarter Q7 sales were higher than anticipated, and Q5 sales were double what they were compared to the first quarter of 2009. Both A3 and A5 sales were also up over 100 percent when compared to last year.

Although the shortage may sacrifice some sales, de Nysschen is remaining positive. One plus: Existing vehicles are selling quickly, reducing dealer costs and allowing Audi to avoid launching incentives.

Source: Automotive News (Subscription Required), Audi USA