Functions on demand.

[monkeyhanger]

But you haven’t paid for the hardware and software. Audi have installed both for free with the calculation that they will make a profit through a certain percentage of people buying the upgrade.

In times past, you could only specify options at the time of buying the car (which is still the cheapest way of getting these features). Audi (and others) are now providing a new option of trying before you buy, or of paying to upgrade the car after buying. They benefit from the opportunity of making money on the car after the initial sale and we customers benefit by having an easy option for upgrade or the flexibility of renting features that we may not want to pay the full cost of.

When the hardware installed is already being utilised on other driver aid systems, they're giving you nothing for free, you've already bought it. For ACC activation, it's just a matter of software activation to marry up the standard CC and pre-sense functions and enable the car's DSG box to go up and down the gears with changes in speed governed by those 2 systems.

For cars like the S3, where it just about breaches that £40k luxury car tax threshold, they could really do some good by offering a bare bones S3 with all the kit inactive at point of delivery for less than the threshold, then offer to activate it all for £3k rather than charging you £43k and making you pay that luxury VED.

 

[AdamInKent]

When the hardware installed is already being utilised on other driver aid systems, they're giving you nothing for free, you've already bought it. For ACC activation, it's just a matter of software activation to marry up the standard CC and pre-sense functions and enable the car's DSG box to go up and down the gears with changes in speed governed by those 2 systems.

That software had to be designed, developed and tested, which cost Audi money. Why do you expect to get it for free?

(If you want it for less cost, you can specify it at the time that you buy the car.)

Your point about using it as a way to avoid luxury car tax is an interesting one It would need the higher cost of installing the features as upgrades to be lower than the three year cost of the higher tax.

 

[400ixl]

The risk for them putting in the hardware and activating after purchase is that there are already a number of ways to do that with other tools. They will have to increase the security against these tools if they wanted to go down that route.

 

[AdamInKent]

The risk for them putting in the hardware and activating after purchase is that there are already a number of ways to do that with other tools. They will have to increase the security against these tools if they wanted to go down that route.

They’ve already gone down that route. (For example, all eTrons are fitted with matrix headlights, which can be enabled using FOD.)

AFAIK, Audi have already put in place measures to prevent OBD tools from enabling features that they supply through FOD. Do you have any examples of tools which can bypass the security?

 

[monkeyhanger]

That software had to be designed, developed and tested, which cost Audi money. Why do you expect to get it for free?

(If you want it for less cost, you can specify it at the time that you buy the car.)

Your point about using it as a way to avoid luxury car tax is an interesting one It would need the higher cost of installing the features as upgrades to be lower than the three year cost of the higher tax.

For many VAG cars which don't already have the hardware in place, £400 is about the cost to add ACC to cover both the hardware and the software on a factory order. I'm not contesting the cost entirely, but charging £400 just for a software tweak on hardware already in place, for tech thats been on VAGs for over 10 years, is way too much IMO. £100 to £150 for that activation is far more in line with my expectations. Your original claim that the hardware was installed for free was incorrect. If it included the hardware cost in that £400, it would be far more justifiable.

At some point, I'd imagine someone will hack the modules beyond the level of access VAG currently allows with VCDS/OBD11.

 

[ptf]

That software had to be designed, developed and tested, which cost Audi money. Why do you expect to get it for free?

But you haven’t paid for the hardware and software. Audi have installed both for free

The base model A3 is almost £28k, the base model S3 over £40k - unless they are making a loss at that price, and the last time I checked Audi is a profitable company so I doubt it, they are not giving you anything for "free". This is not a game console when the hardware itself is sold at a loss (Microsoft have claimed they lose $200 on each Series X) knowing that users have no choice except to buy expensive games if they want to actually use their console.

As has been pointed out adaptive cruise control leverages hardware that Audi would put in the car anyway - speed limit recognition is starting to be mandated by law and both that and lane departure warning systems have to be in place to get a good NCAP score.

Yes, software costs money to develop but it 's a sunk development cost and Audi would recoup it in sales if they only ever sold the base model A3.

In the case of matrix headlights, I agree that might be "extra" hardware but Audi have to fit some sort of headlight - it's likely the incremental cost of fitting every car with matrix headlights and only enabling (or not) the full matrix functionality in software is marginal - or even the same given the volume of parts that Audi make or acquire.

At least Audi seem to offer "outright purchase" as an option - but if they can enable features remotely they can disable them as well, which opens up the possibility that could be done in error, or maliciously. Who's to say they won't do a Tesla and remove features that people thought they had enabled?

 

[theoldschool]

When i picked up my new Edition 1 the other week it was the same. ( only showing themes) also it said demo license on the mmi. After 4 day’s the correct license dates came up and also the FOD on the app.

Checked again last night & ACC magically appeared in my MyAudi app 4 days after I collected the car so all good now!

 

[AdamInKent]

For many VAG cars which don't already have the hardware in place, £400 is about the cost to add ACC to cover both the hardware and the software on a factory order. I'm not contesting the cost entirely, but charging £400 just for a software tweak on hardware already in place, for tech thats been on VAGs for over 10 years, is way too much IMO. £100 to £150 for that activation is far more in line with my expectations. Your original claim that the hardware was installed for free was incorrect. If it included the hardware cost in that £400, it would be far more justifiable.

At some point, I'd imagine someone will hack the modules beyond the level of access VAG currently allows with VCDS/OBD11.

I wasn't speaking about ACC in particular, but about FOD in general. Sometimes the hardware is already in place - as in your example - sometimes it is installed in the car by the manufacturer at risk (eg matrix lights in the eTron).

If it costs £400 to install ACC in a car as a factory option, why are you expecting it cheaper as FOD? Either way, you end up with the same function and you are paying a price for the implementation of that function.

 

[AdamInKent]

The base model A3 is almost £28k, the base model S3 over £40k - unless they are making a loss at that price, and the last time I checked Audi is a profitable company so I doubt it, they are not giving you anything for "free". This is not a game console when the hardware itself is sold at a loss (Microsoft have claimed they lose $200 on each Series X) knowing that users have no choice except to buy expensive games if they want to actually use their console.

I would have thought that the key cost drivers for an S3 over a base A3 are the uprated engine, transmission, suspension, higher design costs etc. Knowing how competitive the car market is in this segment, I think it's a reasonably safe bet that Audi are not charging for the cost of unused features in a base spec car.

As has been pointed out adaptive cruise control leverages hardware that Audi would put in the car anyway - speed limit recognition is starting to be mandated by law and both that and lane departure warning systems have to be in place to get a good NCAP score.

Yes, software costs money to develop but it 's a sunk development cost and Audi would recoup it in sales if they only ever sold the base model A3.

What's your reason for thinking that Audi recoup the software costs of premium functions in the price of base spec vehicles?

In the case of matrix headlights, I agree that might be "extra" hardware but Audi have to fit some sort of headlight - it's likely the incremental cost of fitting every car with matrix headlights and only enabling (or not) the full matrix functionality in software is marginal - or even the same given the volume of parts that Audi make or acquire.

The incremental cost of fitting matrix headlights can be derived from the option price: it was over £500 when I specced them on an S-Line A3 a couple of years ago. So, if I - as someone who specced the lights from new - have paid £500 for that function over the base price of the car; why are you, as someone who paid for the base spec, expecting to get the same feature for less?

This same question applies to any FOD function: why are you expecting to get it for a lower price than someone who specs it from new?

At least Audi seem to offer "outright purchase" as an option - but if they can enable features remotely they can disable them as well, which opens up the possibility that could be done in error, or maliciously. Who's to say they won't do a Tesla and remove features that people thought they had enabled?

All the more reason to keep your sales invoice, I guess

 

[vatdim]

It's a contested topic, but my take is, as long as the manufacturer cannot remove the functionality of any already paid off features (be that via the original purchase, or via an add-on purchase later on), it's not a bother.

For those saying the hardware is already in there so it does not make sense to charge a higher price for the FOD, well... It's not that simple.

In terms of the marginal cost to install the additional software needed for the feature to function correctly, you are correct that this should be pretty low. After all, the manufacturer has already installed all the necessary equipment, the software has already been developed and paid for, and an additional minor fee to cover any installation / setup costs might seem reasonable from that perspective.

However, in terms of the average cost per car sold, things are more complex. First off, it makes sense that a manufacturer might actually realize savings from supplying all the required equipment for FOD in the car at purchase, even though they are not charging the customer for it at this time. This is especially true for widely requested and easily packaged options, such as heated seats, cruise control, smartphone integration, etc. The reason for the potential savings is that, once again, the marginal cost of equipping all cars with the said hardware may be potentially lower than actually setting up additional branches in the part sourcing, ordering and assembly processes in order to separate, e.g. cars with cruise control from cars without that, versus cars with heated seats vs cars without that, etc. Again, this would be especially true for any items that are widely requested by car purchasers, where the potential marginal cost of including said equipment is low.

Having installed all this extra equipment that a certain customer did not want to use per the original purchase order may have resulted in a net saving for the manufacturer, when taking into account the opportunity cost of not installing said equipment in the first place. That doesn't mean, however, that the manufacturer is not incentivized to continue seeking a positive return from supplying those items, be that when dealing with the initial customer or with any subsequent keeper of the car. FOD pricing is a means for the manufacturer to potentially recoup any extra costs associated with installing the equipment in the first place, and for realizing a net profit at that.

You may also think of it in another way. If the manufacturer only charged a minor fee for FOD due to the fact that all the equipment had already been preinstalled, then no one would have an incentive to buy the features outright. This means, however, that the manufacturer would actually provide all the FOD features at a loss, in terms of average cost per car sold. In the end, this would be unsustainable and lead to the removal of the equipment and FOD from future builds, or to a steep price hike for all FOD in order to ensure that the average cost per car is in line with the manufacturer's projections.

 

[monkeyhanger]

It's a contested topic, but my take is, as long as the manufacturer cannot remove the functionality of any already paid off features (be that via the original purchase, or via an add-on purchase later on), it's not a bother.

For those saying the hardware is already in there so it does not make sense to charge a higher price for the FOD, well... It's not that simple.

In terms of the marginal cost to install the additional software needed for the feature to function correctly, you are correct that this should be pretty low. After all, the manufacturer has already installed all the necessary equipment, the software has already been developed and paid for, and an additional minor fee to cover any installation / setup costs might seem reasonable from that perspective.

However, in terms of the average cost per car sold, things are more complex. First off, it makes sense that a manufacturer might actually realize savings from supplying all the required equipment for FOD in the car at purchase, even though they are not charging the customer for it at this time. This is especially true for widely requested and easily packaged options, such as heated seats, cruise control, smartphone integration, etc. The reason for the potential savings is that, once again, the marginal cost of equipping all cars with the said hardware may be potentially lower than actually setting up additional branches in the part sourcing, ordering and assembly processes in order to separate, e.g. cars with cruise control from cars without that, versus cars with heated seats vs cars without that, etc. Again, this would be especially true for any items that are widely requested by car purchasers, where the potential marginal cost of including said equipment is low.

Having installed all this extra equipment that a certain customer did not want to use per the original purchase order may have resulted in a net saving for the manufacturer, when taking into account the opportunity cost of not installing said equipment in the first place. That doesn't mean, however, that the manufacturer is not incentivized to continue seeking a positive return from supplying those items, be that when dealing with the initial customer or with any subsequent keeper of the car. FOD pricing is a means for the manufacturer to potentially recoup any extra costs associated with installing the equipment in the first place, and for realizing a net profit at that.

You may also think of it in another way. If the manufacturer only charged a minor fee for FOD due to the fact that all the equipment had already been preinstalled, then no one would have an incentive to buy the features outright. This means, however, that the manufacturer would actually provide all the FOD features at a loss, in terms of average cost per car sold. In the end, this would be unsustainable and lead to the removal of the equipment and FOD from future builds, or to a steep price hike for all FOD in order to ensure that the average cost per car is in line with the manufacturer's projections.

When that self-same hardware is already in place and is being used for other functions (as is the case for standard CC and Audi Presense functionality vs ACC activation), I do think the price of activating hardware already in place and in use for other standard functions should be considerably lower than the comparable costs associated with fitting the hardware where it has had no other standard use in mind and did not need to be fitted already for its standard features. Either wat, I definitely don't think the cost of activation should be any higher than the cost of factory activation e.g. High beam assist - tick that option on your factory order and it's £100. Add it via FOD and it's £120. Automated activation, could you really consider the extra 20% cost to be an admin fee? It's beyond reasonable.

 

[monkeyhanger]

I would have thought that the key cost drivers for an S3 over a base A3 are the uprated engine, transmission, suspension, higher design costs etc. Knowing how competitive the car market is in this segment, I think it's a reasonably safe bet that Audi are not charging for the cost of unused features in a base spec car.


What's your reason for thinking that Audi recoup the software costs of premium functions in the price of base spec vehicles?


The incremental cost of fitting matrix headlights can be derived from the option price: it was over £500 when I specced them on an S-Line A3 a couple of years ago. So, if I - as someone who specced the lights from new - have paid £500 for that function over the base price of the car; why are you, as someone who paid for the base spec, expecting to get the same feature for less?

This same question applies to any FOD function: why are you expecting to get it for a lower price than someone who specs it from new?


All the more reason to keep your sales invoice, I guess

What's your thinking that Audi charitably give away functionality for free on lower priced models and only charge for it at the higher end? Audi will aim to charge for everything they give you in the standard spec for tgat model/trim. That amount might vary a little as equipment packs appear to be better value generally than the sum of that equipment sold on an individual basis, and certainly, for a given model to spec the likes of ACC, if the hardware isn't already in place for other standard features, that model should cost more to spec than for a model with the hardware already in place because it does have other standard features that use it.

 

[helicopter_red]

My take on this would be;
Everything that the car needs to have hardware wise will be present, but only the selected options will be available.
anything not standard hardware wise such as electric seats, kessy some of the assistance options that need additional hardware etc. these wont be fitted, due to cost to Audi for no financial gain, as the customer didn't want them.
Audi will then flash the ECU software, enabling the selected options, a process all cars would have to go through, so no additional cost.
Anything that could be available but wasn't selected in the options is a separate income scheme, (FOD).
The only anomaly with this is the Matrix headlights, but as they only seem to be present on high end models i'm sure they will get the extra income stream from them at some point and I bet there is not a lot of difference in the item cost between Normal and Matrix headlights to Audi anyway.

Audi wont give anything for free if they don't have to its all about making maximum profit and creating new revenue streams, if somebody has a company car for three years, they wont necessarily pay for lifetime FOD options, so Audi will be paid for the same options at least twice if not more. We will also be faced with a quandry in three years when the MMI mobile access expires, as some have already said its not great value.

In the future I'm certain leasing will be the most common option where everything other than the basics will be an additional monthly charge, like you TV packages etc Films, sports etc.

Just my take on things, not necessarily correct.

 

[vatdim]

When that self-same hardware is already in place and is being used for other functions (as is the case for standard CC and Audi Presense functionality vs ACC activation), I do think the price of activating hardware already in place and in use for other standard functions should be considerably lower than the comparable costs associated with fitting the hardware where it has had no other standard use in mind and did not need to be fitted already for its standard features. Either wat, I definitely don't think the cost of activation should be any higher than the cost of factory activation e.g. High beam assist - tick that option on your factory order and it's £100. Add it via FOD and it's £120. Automated activation, could you really consider the extra 20% cost to be an admin fee? It's beyond reasonable.

I think we broadly agree on the underlying costs topic, but the main difference of opinions seems to be with respect to the level of profit Audi makes in each particular case. My take here would be that once the average cost per car produced looks respectable in Audi's balance sheet, they would then refer to some good old price discrimination techniques in order to make the most out of the situation and maximize any potential profit.

First off, they would refer to the fact that Audi is considered and marketed as an upmarket brand, competing on the level of BMW and Mercedes. Therefore, it would be going against their brand identity to offer a "value" proposition such as opening up the ACC at no additional cost to the customer (like you could maybe find in a related Skoda), even if said proposition could be virtually cost-free for the manufacturer.

Secondly, Audi would research the amounts charged by its competitors, namely BMW and Mercedes, and attempt to provide a comparable price, as that would be seen as a perfectly normal move by most people cross-shopping these brands. There is no incentive for them to go significantly lower in price, as that could only reduce their profit.

Finally, Audi would offer, in a seemingly benign customer-oriented way, options to "buy" the feature that would appease to the widest variety of shoppers - depending on the duration unlocked they would charge different prices in order to make money out of any potential keeper, as many times as possible. The higher permanent upgrade price works to persuade otherwise unconvinced keepers that they might be fine with renting the feature as needed, while never buying it. For Audi this opens the possibility to receive more than double the regular price of the feature over the lifespan of the car, especially if a subsequent keeper actually gets the permanent upgrade.

All in all, I think it's pretty clever from auto manufacturers to employ these strategies and get the most out of developing and selling options that practically everybody would want to at least sample a few times.

 

[Sparks43]

From what I was told by a friend who works for Audi was that FOD was originally for the dealer to help when selling second hand - A lot of lease companies won't spec their cars high, so by having the features on there, when the car comes back in after 3 years and a private seller comes along, they can say we can switch this on etc making the car a higher spec than when purchased at new.

With regards to FOD costs, some valid points here especially like the Traffic Sign Recognition for example - All the hardware is in every A3 for Lane Assist etc anyway - Although just let it be an option at order stage as it's so annoying sometimes that you can't spec certain options - My S3 (2020) had the option to spec Matrix but after about 6 months you could no longer spec it!!

 

[gboole]

From what I was told by a friend who works for Audi was that FOD was originally for the dealer to help when selling second hand - A lot of lease companies won't spec their cars high, so by having the features on there, when the car comes back in after 3 years and a private seller comes along, they can say we can switch this on etc making the car a higher spec than when purchased at new.

With regards to FOD costs, some valid points here especially like the Traffic Sign Recognition for example - All the hardware is in every A3 for Lane Assist etc anyway - Although just let it be an option at order stage as it's so annoying sometimes that you can't spec certain options - My S3 (2020) had the option to spec Matrix but after about 6 months you could no longer spec it!!

I don't have an option for traffic sign recognition on FOD, so I m guessing the hardware is not there either.

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[Sparks43]

I don't have an option for traffic sign recognition on FOD, so I m guessing the hardware is not there either.

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The hardware should be there as it's the same camera for Lane Assist etc - I added TSR using FOD on mine although the original software for the car needed updating before I could see it

 

[400ixl]

The traffic sign recognition is only available to buy in certain regions. If you change your MyAudi session to German Language in a web browser you should see it become available to buy.

 

[gboole]

The traffic sign recognition is only available to buy in certain regions. If you change your MyAudi session to German Language in a web browser you should see it become available to buy.

I ll give that a try, but I remember last time I logged in from a different country it didn't show up either

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[400ixl]

I tried it the other day, changed region from UK where it is not available to me to Germany where it then showed up. Wasn't worth what they wanted for it though.

 

[ptf]

Allowing after market enabling of features that could have been selected at the time of the original purchase could be said to increase flexibility for owners - assuming that said features are available as a one-off purchase for a similar price; there's a separate argument whether the price is reasonable for flipping a bit in a ECU config.

As has been mentioned it is likely that Audi (and other manufacturers) are finding that there are gains to reducing inventory complexity and just fitting "extra" hardware to every car, but leaving it disabled in software - odds are that this is cost neutral to the manufacturers (or, frankly they wouldn't do it) or even lowers their costs (because pushing hardware functions into software tends to do that).

So I see at least two problems.

The first is the extent to which customers are benefitting from the cost saving - and I'm not convinced that charging £400 to flip a software bit is exactly passing on the reductions to consumers.

Yes, the software has development costs but some features will have the basics sorted out across the whole fleet - and Audi sell 1.6 million cars a year. Obviously there will be tweaks to each model but once you've written the software for adaptive cruise once you've written it in principle for every car that Audi ship. Does that feature really cost Audi £640million a year to maintain?

The other problem is that this might represent thin end of the wedge - Audi are allowing outright purchase at the moment but what's to stop them flipping to subscription only? They've also locked down these features with encryption to stop 3rd party OBD tweakers selling cheap activation. But how far down the rabbit hold will Audi go - will it be impossible to do 3rd party repairs without taking your car to an authorised dealer to have new parts correctly coded to the car?

Before anyone says "oh but the EU laws prevent this sort of thing" - well, yes but those laws are there for a reason and it's *exactly* what happens in the 'States in some instances, and why John Deere has just lost a big lawsuit regarding right to repair. If the car manufacturers could weld the hood (or bonnet if you prefer) shut and only allow us to get stuff done at franchised dealers I am certain that they would be very happy to do so.

 

[vatdim]

The first is the extent to which customers are benefitting from the cost saving - and I'm not convinced that charging £400 to flip a software bit is exactly passing on the reductions to consumers.

Yes, the software has development costs but some features will have the basics sorted out across the whole fleet - and Audi sell 1.6 million cars a year. Obviously there will be tweaks to each model but once you've written the software for adaptive cruise once you've written it in principle for every car that Audi ship. Does that feature really cost Audi £640million a year to maintain?

I think what's important to realize here is Audi aren't doing this for the customers. They are a business and their ultimate motive is and always will be making (maximizing) profit. As you correctly pointed out, putting the hardware inside all the cars might even result in a cost saving for the company. That doesn't mean they will not be incentivized to make additional money out of selling the feature later on. As far as I'm aware, there is no legal hindrance for their actions so far.

The other problem is that this might represent thin end of the wedge - Audi are allowing outright purchase at the moment but what's to stop them flipping to subscription only? They've also locked down these features with encryption to stop 3rd party OBD tweakers selling cheap activation. But how far down the rabbit hold will Audi go - will it be impossible to do 3rd party repairs without taking your car to an authorised dealer to have new parts correctly coded to the car?

Before anyone says "oh but the EU laws prevent this sort of thing" - well, yes but those laws are there for a reason and it's *exactly* what happens in the 'States in some instances, and why John Deere has just lost a big lawsuit regarding right to repair. If the car manufacturers could weld the hood (or bonnet if you prefer) shut and only allow us to get stuff done at franchised dealers I am certain that they would be very happy to do so.

I'm with you on this one. There's a real problem here that already "purchased" features may get revoked sometime along the car's life. I think we need legislators to step in here to make sure there are strict limits on what a car manufacturer could do remotely to an already sold car. For example, it should be clearly stated that a manufacturer is not allowed to brick any car and / or feature already acquired at the time of purchase, or fully paid for thereafter.

 

[gboole]

The traffic sign recognition is only available to buy in certain regions. If you change your MyAudi session to German Language in a web browser you should see it become available to buy.

I tried to make a new configuration for an identical car as mine and it needs to have the oem navigation to add it. So I guess if I add navi I ll get that too. Not worh the money

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[Trojan]

I like the road tax and P11d company car tax benefits.
You can get a near base spec car with a prescribed taxable list price and pay your company car tax based on that value. Then add the options you want without it affecting the taxable list price.
Away from company car drivers there will some benefit to keeping the list price below £40k to avoid the additional road tax burden.

 

[SimonQ5]

As shared on the RS3 section, this has worked!
View attachment 249983View attachment 249985View attachment 249986
Thanks for pioneering this and fighting the system! Audi Digital Services are still trying to tell me this morning that my car is not compatible! I've not corrected them yet

As shared on the RS3 section, this has worked!
View attachment 249983View attachment 249985View attachment 249986
Thanks for pioneering this and fighting the system! Audi Digital Services are still trying to tell me this morning that my car is not compatible! I've not corrected them yet

Hi RSt3ve, hope you're well. I am new to this site after coming across your posts regarding FOD. I recently purchased a new 23 plate Q5 and for some strange reason it doesn't come with the traffic sign recognition. I tried to follow how you got yours installed via the myAudi route but the option for me never comes up even after trying multiple countries as mentioned by others. It says. It comes standard on the new Q5 but when I spoke to my local audi dealer they can see it says traffic camera without even though it has the windscreen camera etc. Any idea of what I can do as it would be great to get this loaded onto the Q5. Thanks

 

[SimonQ5]

Evening, can anyone asssit me with the below as I am having no joy from my local Audi dealer. I recently purchased a new 23 plate Q5 and for some strange reason it doesn't come with the traffic sign recognition. I tried to follow how you got yours installed via the myAudi route but the option for me never comes up even after trying multiple countries as mentioned by others. It says. It comes standard on the new Q5 but when I spoke to my local audi dealer they can see it says traffic camera without even though it has the windscreen camera etc. Any idea of what I can do as it would be great to get this loaded onto the Q5. Thanks