American angle

AUDI aspirations to become the world's leading premium brand by 2015 are being built around growth in markets like China and Russia but are also being hitched to a market not normally noted for growth – the United States.

Ralph Weyler, member of the board of management of Audi AG and head of worldwide sales and marketing, told GoAuto at the Australian International Motor Show in Sydney that Audi wanted to sell 1.4 million cars a year by 2015.

The irony is that much of that growth is expected to come from the US where Audi is now building momentum after its long recovery from the sales disaster of the 1980s when the so-called unintended acceleration issue devastated the brand.

Audi sales in the US fell from about 80,000 a year to 12,000 units a year.

"We were nearly dead," Mr Weyler said. "But gradually the brand has recovered and now we are at the level of 90,000.

"BMW at that time also had 80,000 sales but now BMW is selling 250,000. So there is a lot of improvement we can make (in the US) now that we have lots of good products and the perceived quality values are good." Mr Weyler said that market share in New York, Miami and Los Angeles shows the brand had a significant upside in the US market and that US sales had risen about five per cent this year.

Audi is now the leader in the premium segment in China and in Russia and is selling more cars in the United Kingdom than Mercedes-Benz. Audi worldwide sales this year are expected to reach 890,000 – 60,000 more than last year. In China sales in the nine months to September were 60,000 – up about 65 per cent on the previous year.

Mr Weyler said that to achieve 1.4 million sales there was "a lot of work to be done".

He said Audi would add new models in saturated northern hemisphere markets in order to conquer new customers, and that growth would also come from new markets like China, Eastern Europe and South-East Asia.

"But we have a clear objective and we have already put the resources behind it.

"The most decisive point is that we are prepared to go for that (objective).

"The billions of Euros (necessary) are already guaranteed by the supervisory board. We have the product projects. They are all on the way and already in the pipeline. We are investing in the sales and marketing organisation, we are hiring people, we are founding additional national sales companies and we are supporting dealers to build up new facilities.



Left: Ralph Weyler.

"This is all being done." Mr Weyler said that the expanded product range and increased sales aspirations would mean dealers – including Australian dealers – would need to invest in bigger facilities, not just in larger showrooms but bigger service departments.

"In a number of locations we are in good shape. But we need some bigger dealers because our product portfolio has been expanded. Compared with some of our other competitors we have to catch up.

"There are a lot of investments going on around the world at the moment. There are a lot of projects to renew or bring the facilities up to the standard.

"This is not just a question of facilities but also the commitment of the dealer to the future (of Audi) because he has to spend five, seven, 10 or however many millions and this means he has to be convinced on the business model.

"Because we have so many new projects (model range expansion) the dealers are convinced and motivated up to a very high degree.

"We have not really needed to persuade them (to invest) because they know what the business is like now and they know what is coming. That is why they are investing." Meanwhile, Mr Weyler said that controversy over the failure of the Q7 SUV to achieve a five-star rating in European NCAP had been settled.

The four-star rating had some commentators suggesting that the Q7, an SUV aimed at American buyers, had been built to US crash standards rather than more demanding European NCAP requirements.

Mr Weyler said it was not a matter of Audi making cars at lower standards for American buyers.

"Absolutely not." He said: "There was not a problem (with the crash standard of the Q7). It was a preproduction car which was tested. Now they have analysed (the results) and it is fixed. The US crash test was perfectly executed.

The European test "was a pre-production car and if we were to run this test now it would be the five-star as well." Ironically, sales of the Q7 in the US are about half of what Audi expected and it is more of a hit in Europe.