Audi’s dealers to dig deep

AUDI dealers in Australia face a review of their facilities over the next few years as Audi Australia gears up for an increase in the company's model range and for plans to increase sales in line with the company's international strategy.

Audi Australia has targeted 5800 sales for 2006 and has set a medium-term target of about 8000 units for 2008.

But Audi Australia managing director Joerg Hofmann told GoAuto that the capacity of the Audi network to deliver more showroom space and handle the service numbers flowing from increased sales was now under review and would be the focus for the next five years.

There would be a heavy investment by Audi dealers, he said. There would also be a modest increase in the number of Audi dealers.

"We have 28 dealers at the moment and we think we will need about 35 dealers over the next 10 years," he said.

Mr Hoffmann said the easiest way to increase volume in a very fast was to "just increase the number of dealers".

"But that works for only four or five years before the whole network is bankrupt.

"That is not what we want to do. We believe the number of dealers is right. If we want to grow the volume over the next few years we will slowly increase the number of dealers but only to a certain level. It will not be much. You will not see a big increase.

Left: Audi Oz MD Joerg Hofmann.

"We have good quality, motivated group of dealers on board right now in Australia.

"The next step is to look at the quality of their facilities for the mid-term and the long-term that will be able to sell all the new products that are coming. Q7 is a car that needs space. We get more product with the R8. All of these cars have to be displayed properly."Mr Hofmann said it was difficult to estimate how many of the current 28 dealers would have to invest significantly to accommodate the increased Audi range.

"We are just in the process of investigating that. Who is in a position to sell all the product in the future and who has to invest. So it is too early to tell you a number. But one thing is clear, you will see a big investment and commitment in the Audi network facilities in Australia very soon.

Mr Hofmann said he could not say what sort of investment might be needed by Audi dealers to meet the factory's requirements, although he suggested that a dealership in a city like Sydney might have to spend $10 million whereas a country dealer might spend one or two million dollars.

Mr Hofmann said there would be no need to increase the number of country dealers significantly.

"This is not our strategy. As you know, you cover 75 per cent to 80 per cent if you are well represented in Melbourne, Sydney, Brisbane and Perth. That is almost all the volume."