Audi Targets American Luxury Market
September 18, 2007
Audi AG is setting its sights on a far larger slice of the American luxury car market with a plan to more than double its sales there to 200,000 by 2015.
"We are selling 95,000 [vehicles] now. By 2015 we want a doubling of the number," Ralph Weyler, Audi's head of marketing and sales, told the Financial Times.
Audi’s ambitious target is the German automaker’s effort to close the sales gap with industry leader Toyota Motor Corp. by investing in territories where the Japanese car manufacturer dominates. The premium brand of Volkswagen AG will put emphasis on the manufacture and sale of sport utilities, the segment where Toyota is hauling shoppers.
Martin Winterkorn, the Volkswagen CEO, wants the brand to increase its global sales by ten percent a year and exceed eight million units by 2010.
Additionally, the German automaker will retool its dealership network in the United States. The company will also develop a new sport utility dubbed the Q5. This is to elevate its standing in the world’s biggest auto market. This is why the company is improving not only the Audi clutch master cylinder and other auto parts but the entire lineup itself.
Audi has to struggle to cope with the increasing challenge in the American market where it is less successful that European automakers like BMW. Audi intends to become "the most successful premium brand in the world", with 1.5 million sales by 2015, although BMW's own unit sales targets are even more ambitious. Audi's newest models are receiving rave reviews in Europe, and in China the brand outsells both BMW and Mercedes.
In the United States, the brand has underperformed since the 1980s, when reported problems with "unintended acceleration" of one of its cars hit its business. To stress, Mercedes-Benz and BMW were quicker to develop sport utilities - a popular auto format in America. More recently, Audi has been successful with its Q7 SUV.
Audi planned to increase the quality of its dealers in the US, many of which are "multi-franchise" outfits selling its cars alongside those of other brands, Weyler said. The company has about 110 exclusive dealers, and will maintain its focus on large metropolitan areas on the American coasts and cities such as Dallas, Houston and Chicago.
Sales of luxury cars in the United States are proving tough in spite of recent market volatility linked to the subprime mortgage crisis. BMW, Mercedes, Toyota's Lexus brand and Audi all reported higher sales in August this year. Unlike Mercedes and BMW, both of which have factories in the United States, Audi had no plans for local production. "At the moment, we don't have adequate volume," Weyler said. Volkswagen, on the other hand, is weighing the possibility of building its first US production plant.
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