supply – AUSmotive.com

Audi A1

The next big thing, aka the Audi A1, is getting an early lesson in supply and demand. Production began in earnest this week and around 500 A1s are being built every day. That’s quite a lot for a new entry level premium product. Audi plans to build 50,000 cars before the end of 2010. That’s a lot too.

But it’s not enough. At least that’s the case according to Peter Schwarzenbauer, Audi’s head of sales and marketing. Speaking to Automotive News Europe, Herr Schwarzenbauer said, “In view of the high demand, orders could surpass the production capacity this year.”

That means hopeful A1 buyers may need to take a ticket and stand at the back of the queue. What will be pleasing to Audi’s top brass is around 90% of those interested in the A1 are first-time Audi buyers.

A1 production is set to increase to 80,000 in 2011 and to 100,000 in 2012. Will this alleviate supply concerns, or will the sales growth of the A1 continue to surpass expectations?

[Source: Autocar]

Hot on the heels of Honda’s F1 exit due to financial concerns comes news of Cosworth’s exclusive tender deal to supply Formula One engines from 2010. Cosworth, of course, has a rich F1 heritage (YouTube clip above showing an old Williams engine revving to 20,000rpm is just a small example).

With this new tender deal the potential exists for all F1 teams to run Cosworth engines. However, if they choose, teams can still run their own engines, albeit with restrictions.

From 2010 any team, let’s say Ferrari, for example, can choose one of three options. The first is to simply run a supplied Cosworth engineâ€”unlikely. Second, Ferrari could build their own new engine to Cosworth’s specification, with technical information suppliedâ€”unlikely. The third, and most likely scenario, would be that Ferrari continues to use their current engine with the freeze on technical development in place. Such moves may be necessary to bring costs down, but in 2010 a little piece of F1 will die.

Regardless of the engine choice each team makes, all teams must use a standard gearboxâ€”a joint effort built by Xtrac and Ricardo transmissions.

The FIA is hoping to sign a minimum of four teams to run Cosworth engines by as soon as Thursday next week (11 December).

The FIA itself has described current Formula One spending as “unsustainable” and these moves are clearly designed to lower running costs, from P1 right through to the back of the field. And while the Cosworth deal may be a boost to the Northampton job market, the question must be asked: will F1 continue to be the world’s premier series for technical development and innovation?

Max Mosley’s letter to F1 teams explaining the engine and transmission deal is shown below.