Audi Rising

Audi has become the top premium brand in the European market, according to Auto Motor und Sport, selling 45,124 vehicles last year. This is no small achievement, as competition among Germany’s premium brands is fierce. Mercedes was the second best-selling premium brand in the market with 39,748 sales and BMW fell to third with 36,832 units sold. Only a year ago, Audi was in 3rd place with 3.9 percent of the market; now it boasts 5.1 percent. In the same period, BMW and Merc market share dropped by less than half of one percent. Audi marketing maven Peter Schwarzenbauer credits Audi’s young vehicle lineup, telling AM und S that new models like the A4 Allroad (above) would keep sales momentum moving.

Audi is remarkably well situated to ride out the weak economic trends in the US as well. Despite a 6.1 percent dip in overall US sales, Automotive News [sub] reports that Audi dealers are the most profitable in the US. Audi of America’s Johan de Nysschen admits that Audi dealers have had a tough time, but that recent reforms to the dealer margin and bonus system is the cause for success. The new system debuted in 2007 and required dealers to sell used cars and work harder for what had until then been guaranteed bonuses. It also raised the overall payout per car, and despite some grousing from dealers, profits rose 30 percent last year.

Audi sees particular growth potential in the Western US. According to Automotive News [sub] two new dealerships are set to open in Audi’s Western sales region, a third is being considered and 15 West Coast dealerships are upgrading or renewing their facilities. That’s an unprecedented level of growth for Audi in the midst of an otherwise contracting market. So what gives?

One theory for Audi’s success could be its actual lack of “true luxury” sales. Automotive News‘ [sub] John Teahen broke down sales over $45k (calling them “true luxury” sales) and found that though sales among luxury brands (those with 20 percent of sales over $45k) were down 18.7 percent, “true luxury” sales (only those over $45k) were down over 30 percent. Since Audi’s percentage of “true luxury” offerings is lower than its German competitors, it offers consumers a less-expensive entry into the mythical world of German engineering.

Another, more popular explanation, involves a qualitative comparison of Audi’s styling with its German competitors. Certainly from this blogger’s perspective, Audi’s exterior styling is far more consistently pleasing than the current crop of Mercedes and BMW offerings. Interior quality, however, does appear to be falling off from once industry-leading standards. But with the R8 proving a convincing halo and having taken over the top spot in the most competitive luxury market in the world, Audi is certainly well poised by the standards of the times.