Audi Will Continue Pruning Its Product Portfolio
You might not have noticed but Audi has been quietly reducing the complexity of its lineup by eliminating certain content combinations, often in select markets. Here, the biggest change was the elimination of the manual gearbox for 2019. But Audi said it needed to be done due to there being an abysmally low take rate for besticked vehicles in North America.
Apparently, the automaker is just getting warmed up on tamping down the configurations. In an recent chat with Autocar, Audi CEO Bram Schot said there was plenty more work to be done. Having already reduced the number of model variants in certain regions by 27 percent, compared to last year’s options, the CEO said the manufacturer still wasn’t where it wanted to be.
“27 [percent] is not the end, the end will be 40 or 45 [percent]. We think it’s the new premium, it’s simplified premium,” Schot said. “It is not easy because at a global perspective, a take rate of 1 or 2 [percent] sounds like an easy decision but in a specific country that could be 70 [percent] of your sales. It’s very hard decision-making. We’ve done it, and we’re down 27 [percent] so that’s huge.”
Further culls could also include model lines. Schot commented: “It’s not only models but variations — do we want to have a normal saloon and a sportback? We’re discussing this currently for a specific model.”
Schot said he wants to have 30 [percent] less model lines. However, he added Audi wanted to grow in higher segments with models such as the A6, A7, Q7 and Q8. At the same time, they want to attract younger customers which requires the need for more affordable, small cars.
The CEO seemed to view the business as a bit of a balancing act. Audi believes that more-youthful shoppers aren’t going to want the same things older customers desire. Unfortunately most people under 35 are broke or at least have less spending money than older generations. Blame the times, boomer greed, millennial laziness, automation, whatever — but that’s the reality and it’s something premium automakers have to contend with.
“We want to get more penetration in high-end segment, but at the same time we want to increase young customers which you do not find in that segment,” Schot explained. “If you take an average customer over 50 years old, they have a completely different requirement set to connectivity and digitalisation than a 25 year old. But the cars where you can afford that most is the cars bought by those over 50.”
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