Merc1

Audi dealers ask for first right of refusal on used R8 sales

Audi of America Inc. wants to stop speculators from buying the R8, its first premium sports car, and flipping it for profit.

So it's copying a Ferrari practice: Dealers will ask would-be buyers to sign an affidavit stating that they will give the dealer first crack at buying back the R8 if they sell it. Signing the affidavit is voluntary.

Among other benefits, Audi's plan could provide dealers with some used R8s, which likely will be in short supply.

"This way we can better control the second life cycle of the car," says Marc Trahan, director of product quality and technical service. "It is such a rare and exotic car, and this protects the customers. And it will be good for the car's residual values."

The R8 goes on sale in the United States in September. Pricing starts at $110,000 for the six-speed manual and rises to $119,000 for the six-speed automatic. Both prices include shipping. The R8 has a 420-hp, 4.2-liter V-8 engine.

300 cars a year

The U.S. market will get only 300 R8s this year - 100 more than initially planned, because of demand, says Trahan.

"Dealers say they could sell many more, but we want to keep the car more exclusive," he says.

Trahan admits that Audi can do nothing to keep dealers from marking up the R8 except "strongly recommend" they don't.

The R8 will be sold by only 109 of Audi's 267 dealers. R8 dealers have agreed to devote at least 400 square feet of showroom space, train five employees and invest up to $40,000 for tools and marketing, says Trahan. All dealers were offered the opportunity to sell the R8, he says.

Allocation will be based on dealers' annual sales, says Trahan. An additional 58 dealers who dedicate one technician will be able to service R8s.

Audi will provide dealers with the affidavits for the resale agreement, which will be presented at the time of sale. The program was discussed with the Audi dealer council, which approved it.

Cars for 'end-users'

Joel Weinberger, owner of Continental Audi, of Naperville, Ill., and chairman of the dealer council, says the affidavit was prompted by "our concern about having the cars get into the hands of people who aren't the end-users."

"When you have a car more in demand than supply, you have people who are speculators and try to operate as dealers without a license," Weinberger says. "They buy a car, sell it and can make more profit than we did the first time around."

Weinberger, who has several orders for the R8 but doesn't yet know his allocation, says he will use the forms at his store.

What if a customer says no?

"Dealers have to manage the situation," Weinberger says. "I don't see why it would be a negative unless the buyer is one of those folks who want to flip it and make a profit right away."

A spokesman for Ferrari North America confirmed that the exotic brand makes "a strong recommendation" that its dealers make buyers sign a first-right-of-refusal affidavit. He would not say how many dealers comply.

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Continental Audi of Naperville is down the street from where I live! This is going to be one seriously hot car it seems.

M

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