Audi, Audi, Audi. To Increase Presence in USA
- January 24, 2007
- Audi, The Car Biz
- Posted by George Peterson
- 1 Comment
Audi’s Johan de Nysschen clearly stated the objectives for Audi of America in an Automotive News World Congress speech given in Detroit last week. de Nysschen is the Executive Vice President of Audi of America Inc. and has plans to make the brand much more aggressive in the United States.
Traditionally, Audi has positioned itself as a traditional, understated European luxury brand in the U.S. Now, de Nysschen says, these days are over.
Audi’s Solid Sales Year Leaves it Still in the Shadow of Lexus, Mercedes and BMW in the USA
Audi sold 90,116 vehicles in the USA in 2006 last year, but has languished in the shadow of its Bavarian competitor BMW from Munich and the unfocused Mercedes lineup from Stuttgart. In Europe, Audi competes much strongly with BMW and Mercedes than it does in the USA, and in China Audi is kicking butt.
This mis-match is not lost on Audi of America and Audi AG management, they want to increase Audi’s position in the USA and de Nysschen is implementing plans to make that happen. Early in his regime at Audi of America, Johan de Nysschen participated in a VehicleVoice video podcast. It would be instructive to watch that podcast again. Very informative.
Audi’s “Separation Plans”
de Nysschen is very high on having all aspects of Audi of America separate and unique from Volkswagen USA. During a dinner at the 2005 Frankfurt Auto Show there was a wide ranging discussion concerning whether Audi should relocate their headquarters in teh USA and where it should go. I volunteered that Bermuda would be a fine choice, but the New York suburbs in New Jersey seemed to be a front-runner as did the suburbs of Atlanta. Shortly after that show, Audi of America it was going to relocate down the street from Volkswagen of America but in completely separate facilities. Apparently, that plan has been put on hold for budget reasons.
But even without physical separation, Audi has gone a long way inside the Volkswagen of America building to make itself different and more upscale.
Really Sweet Products
Having driven several Audi cars and trucks over the past year – RS4, S4, A6, A8, Q7, A3, I have to agree that their cars are VERY special. Their styling is elegant, but up until some upcoming new products, has not been daring. Conservatively styled, Audis have not turned heads, they just have been wonderful cars. We think Audi is getting pretty close to their German competition and is certainly superior to some luxury cars from the Japanese luxury marques. Quattro is something that Audi should continue to stress – it is such an integral part of their DNA we cannot understand why it is not standard. But, i digress.
In the USA, Audi’s image lags the reality of their cars and this has to change.
Audi Must Change The Brains of American Customers
Years ago, a Japanese manager frustrated that his product was not being accepted very well said, “We must change their brains.” He meant that he must find a way to adjust the perceptions of the prospective customers and the media. Audi is very much in the same position.
At the World Congress, de Nysschen said, “Understatement is inherent in Audi’s brand DNA. It is who we are. It is our expression of European luxury. Yet we think it’s time for Audi of America to stop being so understated and be a little more bold and a little more American in telling our brand story.”
How is Audi of America going to accomplish that. Well, as new managment often does, they kill their old ad agency and replace it with a new one. Not Invented Here is alive at German distributors just as it is in American brands. Audi’s new ad agency is Venables, Bell & Partners. First thing on the agenda, kill the “Never Follow” tag line. Also on the agenda, more single point Audi dealerships that can better represent Audi with their customers and provide superior customer service.
A Downer for Audi and Other Luxury Marques – Dropping Free Scheduled Maintenance
On the negative side, Audi has abandoned its bumper-to-bumper scheduled maintenance plan that was a cornerstone of its positioning for years. This leaves only BMW with free maintenance as Mercedes-Benz and Jaguar have recently dropped it with Land Rover expected to follow soon. Based on AutoPacific’s research this cost cutting move by these brands has not been appreciated, and BMW is using it to make hay.
New products in Audi’s product plan should go a long way to enhance Audi’s image compared with that of BMW, Mercedes and even Lexus and Infiniti. The upcoming TT will replace an already very distinctive entry with even more expressive. But, the real news for Audi will come with the arrival of its new mid-engined R8 super sports car that will arrive in Fall 2007. A loose derivative of the Lamborghini Gallardo, the R8 screams exotic luxury sports. It will be very interesting to see what kinds of buyers the R8 brings into the Audi dealerships.
And, we can’t forget about Audi also introducing the Q5 smaller Crossover SUV companion to the Q7. Sometime in the future the R5 will be introduced – a smaller companion to the R8.
So, Audi appears to be poised as a break-out brand. New products, new positioning, more aggressive new advertising, new dealerships in critical locations. Maybe these actions will move Audi’s image needle in the market.
de Nysschen wants Audi to be clearly included among Tier 1 luxury brands the same as BMW, Mercedes and Lexus in the USA. With these plans, if implemented correctly, Audi should be well on the way by the end of the decade, or early in the next.
Audi should have never dropped their Free Scheduled Maintenance. Audi is getting rid of the one of the most appealing reasons to buy an Audi. This will put the car on the “Blacklist” for Americans who will refuse to spend $100 for an oil change and the outrageous costs for Audi’s regular maintenance. If you’re thinking of buying an Audi, you better take a real close look with a calculator in hand.