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.
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ktm: Compare the 335i to the S4, not the lowly A4. Compared the A4 to the 328i. Price out a 335i and a A4 and they are not even close. Now, price out an S4 and a 335i…wow, looks like they are in the same price range. Actually I've been cross-shopping these two cars with similar options (mid-range trim, sport susp., nav, etc.) and I disagree. Not considering the 328 engine nor the "meh" Audi 3.2L V6, it looks like this: 2009 Audi A4 2.0T: ~$44k 2009 BMW 335i: ~$45k The (very sexy) 2010 S4 with a supercharged V6 will easily be ~$55k with those options. How is that is the same price range as a 335i? Notable differences between these two from my opinion: Audi: quattro, mpg, looks BMW: power. Both have a big aftermarket, but BMW has such an amazing engine. If the A4 landed in the upper $30k's (closer to G37 range) with those same options it would be a lot easier buy. I'm just waiting for now. The auto taxes write-off is nice. I'd like to see Audi compete with BMW's 0.9% APR & first two payments free incentives at some point this year.
Here's a price comparison from Michael Karesh's "TrueDelta": Model Year 2009 2009 Model A4 / S4 3-Series Trim A4 2.0T 328i Body 4dr Sedan 4dr Sedan Base Price $31,000 $33,600 6-spd shiftable automatic $0 $1,325 AWD $2,050 $2,000 Heated front seats $500 Keyless access and ignition $500 Navigation system $2,500 $2,100 Obstacle detection, rear $750 Premium Package $3,350 Prestige Package $7,350 Sport Package $1,450 $1,650 Steering-linked headlights $800 Steering-wheel-mounted transmission controls $100 iPod integration $400 Total options $13,350 $13,475 Destination $825 $825 Total Price $45,175 $47,900 Rebate $0 $0 Net Price $45,175 $47,900 Lowest Net Price A4 2.0T 4dr Sedan Difference $2,725 I'm trying to figure out how you make a well-equipped 335xi (remember, to be truly a direct comparison to Audi, the BMW has to have AWD) price out about the same as 2.0T? Also, Audi has hinted that the price of the newest (B8)S4 will be the same or less than the current version. As already shown in multiple Euro magazines, the new S4 is measurably quicker and faster than the 335i, and the S4 has won each comparison test between the 2 that I've seen... Just sayin'...