hisport

Is Audi of America and VW Audi Group on the right track in the USA? Kjella - always well informed - thinks that things are better in Europe. I think its more of a global issue. Read on...

"Having spent a good deal of time in Europe on business, I do agree that perceptions of Audi are somewhat different. Particularly in the 3 series / A4 range, Audi has a much better market acceptance in Europe.

In general, however, I feel that Audi is suffering from much the same identity crisis in both US and Europe. I can't speak for Asia.

Agree that the physical products are great, for the most part. Not so the ownership experience, at least here in the US.

To wit: I reserved a BMW 735 with Budget at Frankfurt in 1989. Upon arriving at the airport, no BMW. They gave me an Audi 200 instead. I was furious, having planned to test drive the then new BMW model down to Italy. I was ready to detest the Audi, as the Audi reputation in the US at the time was, well... detestable.

So, off I went, with business stops en route. By the time Milan rolled in sight, I was in love with the Audi. I bought a used 200 (Audi 5000 Turbo)for a song upon returning to the states, and have had a mix of Audis and BMW daily drivers ever since.

VAG has multiple brands. Each needs a clear identity, and a unique product/market position.

BMW and MB are single brand companies with product positioning by model series, not brand. BMW has implemented this much better than MB in recent years.

VAG brand identity and product positioning is a mess, IMHO.

If VAG and AoA would get their ducks in a row, launch the next generation A8/S8 now, and remedy the service/ownership issues, Audi could take a huge market share bite out of BMW (and MB). Instead, what they're doing is a muddle."

John

KjellA

Umm, think you should keep this an US issue hisport, europe is nothing like you describe. Audi has an extremely bigger market share here than in NA, and market acceptance can't be compared at all. Even the most ignorant people will recognice Audi as one of the fine luxury brands here, as in the US, most people don't even know it is a car. Two different worlds altogether, just can't be compared.

There is no "identity crisis" here my friend, you got that wrong. There has been a tendancy in that direction for A3 in particular, and partly A4, but I feel that is already sorted out good with the new lineup (A3 to be replaced soon). You can already tell they are meaning business with the more sporty image, new A4 now being critizised for being too sporty, even for bimmer-fans! The new A8 is missing in this picture, but it will be here this year. Not a big problem.

Identity crisis? Come on, they are rolling like never before, and in the most exciting direction ever!

hisport

Great description of VAG's strategic plans. Most marketing schemes this cerebral tend to fail, however.

I admire your optimism, though, and hope VAG succeeds.

The North American market is still the world's largest (though just barely vs EC). VW and Audi have made huge mistakes here in the past. I believe they've done a little better in Europe.

In the US, only a few car nuts like the folks on this forum know that some Audi models are in the same league as MB and BMW products. Audi has a lot of work to do before moving up market. The current Audi racing program will definitely help. Biggest challenge is a miserably poor US dealership network and a horrible past quality image.

Audi's real US success is younger buyers attracted to the A4 and A6. These same buyers often get switched to VW Passats and the like by US VAG dealers. And their subsequent cars tend to be BMW's, not Audi's. This is not internal competition, its just muddled VAG management.

KjellA

The reason I am quite optimistic when it comes to VAG is the job they have done with their cars the last couple of decades. I mean, Skoda and Seat, probably two of the worst car makers in the world just 15 years ago, now making great cars. They have realistic plans I would *never* have believed 10 years ago.

The thing is, their marketing schemes and strategic moves has worked wonders for 30 years. But from what I hear from you and others on this forum, they have a big challenge with AoA not doing their part of the job....

April

Basically here in the US, Audi was a lame duck for a long time ( since '86 60 Minutes crap to '97 ), and had to play in the shadows of other brands that would keep the lights on at dealerships. Dealers have reluctant to expend resources to improve facilities when profits are almost nil. Audi has made some pretty heavy demands of dealers lately - both facilities and staff. Those dealers wishing to get more allocations, must follow Audi dictates. However, Audi dealer profit margins are MUCH smaller than other luxury car brands - this makes is very hard to attract and pay for the top talent as there is already an industrywide shortage, to say nothing of building top flight showroom/service centers.

An example would be the dealer at which I used to work. The first round of dealership improvements cost a little over 3 million ( there have been 2 more upgrades since then ), with Audi picking up half the tab. Imagine that each car sale grosses an average of $1500, and nets approx $300 after everyone gets paid and overhead is delt with. Average dealer sales approx 50 to 60 cars per month. As you can see, there just isn't that much incentive. The main source of income is from the service dept - especially non-warranty work.

The turn-around is happening, but not a fast as those of us who are on the inside track would like. Audi does not plan to increase North American allocations for this year ( past 4 years have seen 30% increases each year ), while launching a massive ad campaign. They are hoping to increase brand awareness and demand - creating an avenue for the dealer to acheive a higher sales margin. More demands are coming down from Audi to the dealers in the near future.

April

reading between the lines, was that there are a lot of people left over from the bad times of Audi corporate here in the US. They are very conservative, many are older ( a conflict with their youngest in niche buyers ), and at the mercy of VWoA. They are getting better by leaps and bounds, but slow by VW standards. Even though both companies share a building, the culture is very different. VW is hip and happening, while Audi is dignified and maybe a little stuffy. That has to change.

An illustration of this is in the specialist training for each brand. During the class intro, the VW trainer plays the coolest songs from VW ads, and other young energetic music ( Smash Mouth, etc ). The Audi trainer plays Sara Brightman at her most melodramatic. VW has a number of women in highly visable internal postions, while Audi has none.

Things are turning around at Audi, and the house is coming to order, but it is not dynamic.

hisport

April:

Hope that you have an ear at AoA. Your inside glimpse at VAG USA explains alot.

Wish you and others like you were in charge at AoA.

BMWNA has been influenced in the right direction by BMWCCA; Porsche NA by PCA. I joined the "Quattro Club" for grins when I bought my A8 recently, but it seems pretty lame/thin. Nothing other than a 3 month old magazine.

Love the sideways Alfa shot! A Milano sedan?

Let's speak up to AoA! Who's in charge there?

Tks