Audi Q-car on cue

BRISTLING with bravado, a resurgent Audi will next year make its most serious attempt yet to erode BMW's luxury car sales supremacy in Australia by attacking the heartland of its nemesis' success with a redesigned version of its volume-selling A4 sedan and a brand-new mid-sized luxury SUV that will target the X3.

The buoyant German, which yesterday revealed it remains the nation’s fastest-growing luxury brand with sales up 41 per cent in the first four months of 2007, has also announced further details for the bevy of new additions it will launch this year.

They include next month’s TT Roadster and S3 hot-hatch, September’s R8 super-coupe, the diesel-powered Q7 V8 TDI super-SUV and its all-new A5 and S5 coupe twins (see separate story).

However, it is the two key models to be launched in late 2008 that represent the greatest sales volume potential – and the most formidable threat BMW has yet seen from Audi.

September's Frankfurt motor show limelight will be reserved for the global debut of a redesigned, B8-codenamed A4 sedan, representing Audi's best chance ever to emulate BMW's volume-selling 3 Series sedan (which to March this year has attracted as many buyers as the Mercedes C-class and A4 combined) in terms of both sales and dynamics.

Next year will also see Audi plug another gap in its systematic quest to offer a direct competitor for every BMW model, with what Audi's local chief describes as "the perfect car for Australia".

Due to make its world premiere at the Geneva motor show next March, the A4-based Q5 is Audi's direct response to BMW's 3 Series-based X3, the mid-sized luxury SUV that in Joerg Hofmann's view has never achieved its full potential Down Under.

"This is exactly the product we need for Australia," the Audi Australia managing director told GoAuto at last week's Allroad MkII launch.

"The Q5 will compete directly with X3. I know the X3 and I think we have the chance to match its sales. I won't comment on why it never really kicked off here, but I have a good idea..." Mr Hofmann said that the final Q5 design was locked in, despite the fact it has not been previewed by a concept car "study", as is Audi's usual reveal procedure. In fact, last month's Shanghai motor show played host to the Audi Cross Coupe Concept, a show car that heralds Audi plans for an even smaller SUV, the circa-2010 Q3, before its larger production-ready sibling has been officially revealed.

Either way, the Q5, a smaller stablemate for the Q7, has been confirmed for production in 2008 at Volkswagen luxury brand's Ingolstadt facility in Bavaria, where 300 million Euros has already been invested in preparation and where 1700 will produce it alongside the A3, A4 and TT.

Audi's second dedicated SUV model will play an integral role in the company's drive to achieve one million sales in 2008, and 1.4 million sales annually by 2015 – up from the 905,100 it sold in 2006 (up 9.5 per cent on 2005 figures).

Locally, Audi Australia hopes to add another 1000 units to its sales tally this year (as it has done every year since 2004, when it became a wholly owned subsidiary of Audi AG), by selling 6700 vehicles in 2007 – up from 5770 in 2006, 4808 in 2005 and just 3700 in 2004. Meantime, after the first three months of 2007, BMW sales are down 3.4 per cent and Mercedes sales are down 2.9 per cent.

"We're running at 40 per cent growth, but we can't sustain that,” said Mr Hofmann. “We hope for 15 per cent, or at least double-digit growth again in 2007.” Of course Audi Australia has a long way to go before it matches BMW’s static tally of 16,000 sales last year, or indeed the 18,100 cars and trucks sold by Mercedes-Benz in 2006 (up from 17,660 in 2005). However, the Audi boss points out that both German giants have had factory representation here for many more years.

Mr Hofmann will next week meet with Audi AG executives to formulate the company’s sales targets for 2015 in Australia, and how to achieve them. An extensive expansion in the dealer networks sales capacity is already underway to cope with the influx of new models, and Mr Hofmann says 10,000 sales are achievable “within a few years”.

Though it is not expected on sale here until late 2008, Mr Hofmann believes the Q5 can attract more than 1000 customers a year in Australia – a sales figure that would eclipse that of the successful Q7, which put Audi in another new segment in September 2006.

From top: Cross Coupe Quattro concept, Roadjet concept, R8 supercar, S3 hot-hatch, S5 coupe, TT Roadster and A6 Allroad.

Since then the Q7 has shot to fourth on the luxury SUV best-sellers list this year with 431 sales (and a 10.2% segment share). To March this year, it trails new class-leader, the Lexus RX (833 sales/19.7%), the Mercedes M-class (561/13.3%) and Volvo’s expanded XC90 range (491/11.6%), while BMW was caught napping with a lack of X5 supplies at model changeover time.

Both the X3 (255/6.0% and static at around 80 sales per month) and the X5 (166/3.9% – 70 per cent down on its average running rate of around 200/month) lie behind Land Rover’s Discovery and Range Rover Sport and Jeep’s Grand Cherokee, with a new Freelander, Benz MLK and Audi Q5 yet to enter the segment.

Mr Hofmann confirmed the Q5 will be available here with both petrol and diesel power, as part of its commitment to offer an oil-burning engine in every major (four-door) product line since last October’s Q7 3.0 TDI, and that Audi will eventually have a rival for BMW in every major segment – and then some.

The A4 sedan is expected here by mid-2008, followed by Avant and Cabriolet bodystyle derivatives, leading to a total renewal of the Audi range by 2015.

Audi AG will invest 8.4 billion Euros by the end of 2011 to expand the number of models it produces from 22 currently to 40 by 2015.

"There will be no niche in which Audi won't be. There is space below the Q5 (for another SUV)," Mr Hofmann said, suggesting that another sub-A3 model was also on the agenda to join Europe’s alloy-bodied A2 at a more realistic price to rival BMW’s Mini and the Benz A-class.

Chairman of the board of management of Audi AG since January this year, Rupert Stadler is also on record as saying an all-new small car is under study. “Of course, we are also looking intensely at a small car, an attractive product for customers who want a premium vehicle in this segment too,” he said, soon after his appointment.

This October’s A5/S5, which is being launched in Europe this week, will be the first Audi model to ride on an all-new platform with redesigned steering systems and more rearward-mounted engines for better weight distribution, but the A4 and Q5 will also share the radical new architecture.

Riding on an extended version of it will be the fourth-generation (C7) A6 sedan and Avant around 2012/13, a model this is likely to spawn the final piece in Audi’s alphanumeric model naming policy.

The upmarket A7/S7 could become VW's answer to the four-door “coupe” craze started by the Benz CLS and Maserati Quattroporte and to be joined by Porsche’s Panamera, Aston Martin’s Rapide and BMW via last month’s CS Concept-based four-door, which could become a reborn 8 Series.

Further downstream and expected to surface in production guise by the end of this decade, the Q3 should be the first Audi model to employ parent company Volkswagen Group’s next-generation small Golf platform, which will also sprout a third-generation A3 hatch by 2011. The rumoured A3 Cabriolet, essentially Audi’s take on the VW Eos, may materialise before the next-generation A3.

This year’s R8 and A5/S5 coupes will add small but incremental sales volume for Audi, with the latter forecast to attract up to 1000 buyers annually (which would almost match BMW’s E92 3 Series Coupe and the Mercedes CLK) and the R8 adding 30 sales – and immeasurable kudos – to Audi’s bottom line this year.

Despite a projected price of $260,000 - the same as the V10-powered S8 and $100,000 more than Audi's own RS4 sedan ($164,500) - Audi Oz now holds 60 deposit orders for its first supercar and has an allocation of just 30 in 2007, but is lobbying for a further 30 examples next year.

What’s coming from Audi:
A6 Allroad MkII	May
TT Roadster MkII	June
S3 hot-hatch MkII	June
R8 super-coupe	Sept
Q7 4.2 TDI SUV variant	Oct
A5 3.2 multitronic	Oct
S5 4.2 quattro manual	Oct
A5 3.2 quattro tiptronic	Mar 2008
A5 1.8T multitronic	Apr 2008
S5 4.2 quattro tiptronic	Apr 2008
A5 3.0 TDI quattro tiptronic	Aug 2008
A4 sedan MkIII range	Mid-2008
Q5 medium SUV range	Late 2008
RS6 sedan	2008
RS5 coupe	2008
A3 cabriolet	2009
A4 Avant MkIII range	2009
Q3 compact SUV range	2010
A4 cabriolet MkII range	2010
S4/RS4 range	2010
A8 sedan MkIII range	2010
A3 hatch MkIII range	2011
A6 sedan MkIV range	2011
A6 Avant MkIV range	2012
S3 hot-hatch MkIII	2012
A1 hatch range	2012
A7/S7 coupe range	2013
A6 Allroad MkIII	2013

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