Vibrant Audi reveling in booming sales

Vibrant Audi reveling in booming sales

By Alexander Corne

Audi may not be familiar to Indonesian car buyers yet, but it soon will be.

Internationally, Audi is rapidly becoming regarded as a peer of its more well-known German competitors, Mercedes Benz and BMW.

After separating its sales and marketing operations from its parent company, Volkswagen, the revitalized prestigious German marque is reveling in booming sales.

In Germany, its strongest market, sales are now neck and neck with BMW, up an effective 32.7 percent. Mercedes-Benz has lost ground to both Audi and BMW this year.

Worldwide, Audi's sales rose 22.4 percent this year to just under 400,000 cars, driven mainly by the rapturous reception given to the new A4 sedan, which is set for an Indonesian launch by the Indomobil Group for the middle of next year.

This rise in sales and equality in the battle for sales on home ground in Germany, with competitors such as BMW, will help the marque establish its credentials as a serious player in the Indonesian luxury car market.

In the past, Audi's biggest failing has been its inability to square up to BMW and Mercedes-Benz in markets outside Europe, where it is not so well known and where its Volkswagen links were more of a hindrance than a help in establishing and enhancing its executive appeal.

The most dramatic failing though, has been the persistent low resale values of Audi vehicles, and this is now the area of main focus for Audi's marketing men.

In new markets such as Indonesia, armed with an independent marketing policy, Audi hopes it will avoid the poor resale values it suffers in Europe, and establish the brand as a high quality, aspiration marque, which will then provide demand not only for new cars but also for used ones.

"Audi is in the process of transformation, aiming to achieve a better balance, one of technology and market/customer orientation," the company's board member for marketing and sales, Graham Morris said.

The company has a new global slogan, "One name, one standard, everywhere", which indicates not only its global approach to sales; expanding markets in Asia, notably in China; and its full scale return to the Unites States, where sales this year are up 50 percent at 18,000 cars.

The single standard hints at Audi's rumored future manufacturing plans for the United States, as well as its plans to export A4 sedans from its South African factory.

There are also longer term plans to export cars from China, where VW-Audi has been building the older C3 Audi 100 for several years.

Audi has been in control of its own marketing and sales destiny for only a short time, but moving out from under VW AG's wing has boosted enthusiasm and energy within the company.

Shedding the dowdy, conservative and purely technical focus of the recent past, Audi wants to add greater emotion to the marque which made fully galvanized body shells, quattro four wheel drive, the short lived Procon Ten safety system and, more recently, aluminum space-frame technology the defining moments of its previous slogan Vorsprung durch technik (advancement through technology).

Morris promised Audi's new emotion would add passion, soul and more humanity to customer services, as well as the product.

Audi's product plans for the next five years are testament to the new vigor within the company.

Just four weeks ago the TT and TTS show-stopping concept cars from the Frankfurt and Tokyo motor shows were given production approval by the board, while the A3 hatch is to be launched in March next year, opening up a lucrative and high volume new market to the company.

Further away is the much talked about A2, a smaller version of the A8, which utilizes the weight saving technology of the pioneering flagship of the marque.

While Audi was the prestige brand of the Volkswagen Group, it did not dictate its own destiny beyond the factory gates. Now it has the power to select dealerships, review customer relations and place its product more accurately in specific markets.

Exports are high on Audi's agenda, with about 60 percent of the proposed 100,000 A3s built every year leaving Germany.

Production outside Germany is also a key focus, with China, South Africa and a proposed plant in the United States aiming to spread Audi's global coverage.

The company is planning to expand its impact in Asia considerably, and hopes to have kit assembly plants going in Malaysia and possibly Indonesia within the decade.

However, the company realizes that its lack of exposure in Asia means that its sales lag behind its obvious German rivals.

As one executive told Automotive Business: "We have no image in Indonesia. We are practically unknown, so we will have to start at the beginning.

"In some Asian markets we are known because of our association with Volkswagen, but we hope that we can establish a separate identity of our own and raise an image comparable to that of the other German carmakers."

The quality of the company's products is in line with its German rivals, but its lack of image must be, and will be, addressed.

According to Morris, Audi's technological strengths will lead the company forward. He wants to add emotion to the mix of technological advancement within the company's European image.

Audi is one of Europe's pioneering carmakers. It has successfully developed a race and rally-proven four wheel drive system, which adds considerably to traction, while its research into turbo charged diesels has produced some of the world's cleanest burning, more powerful and frugal engines.

It has also ensured that all its technology can fit into most of its cars. The modular approach means the A4 and A6 medium and large cars can share engines, both different types and sizes, two and four wheel drive transmission, as well as internal equipment levels. Both A4 and A6 also have station wagon variants.

The ranges also overlap, so the top A4s use similar equipment to the lower spec A6s, and the top A6s share engines and trim with the A8. The 2.8-liter V6 engine can be found in all three cars, as can the quattro four wheel drive system.

In some markets, Audi offers the quattro four wheel drive system as an option on every model.

The mid-sized A4 sedan is likely to go on sale in Indonesia in the middle of next year.

The vehicle's specification is yet to be confirmed, but the price is likely to be in the Rp 175 million bracket.

The car has been lavishly praised by the international motoring press and the absence of a luxury brand image in Indonesia appears to be the only obstacle that could prevent it from succeeding.