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.
I think a lot of this is down to the fact that you couldn’t fart near a Merc without fritzing some of its electrical components and you couldn’t look at a flame-surfaced BMW without feeling like burning your retinas off.
Audi, with its mediocre reliability (better than Merc) and teutonic styling (better than BMW) slipped between the two.
Personally, I’d think that the styling has a lot to do with it. It’s vanilla enough for everybody to like it, but it’s somewhat edgy with that big grill and also quite clever as to how the different planes go into one another and in terms of the overall shape.
Another thing is that Audi covers a middle ground between BMW and Mercedes. It’s not as sporty as a BMW and not as comfortable as a Mercedes, but somewhere in between. And while BMW and Mercedes customers hardly ever cross shop, both could easily get an Audi.
I think you both (above) have nailed it.
And that A5 is a stunner to look at – even if it drives poorly.
Or perhaps Audi’s relative lack of brand cache unexpectedly helped it during a year when consumers began to reject the “conspicuous” aspect of “conspicuous consumption”. As an Audi owner, I can say definitively that not a single person in the world is impressed by my car (except maybe other Audi owners). People seem to think it’s a Subaru with leather seats. That’s fine with me, and I imagine it’s increasingly fine with would-be Merc and BMW buyers who don’t want the social baggage that comes with the badge.
And for the time being it has the benefit of lacking the ‘jerks drive those’ connotations of some BMW and Mercedes lines, or the ‘boring people drive those’ stigma of Lexus.
Seth L:
Actually Top Gear did recently announce that Audi is now the official car of cocks, and that people that simply want a good car can buy BMWs again.
I think it’s a combination of really good styling (as others have said, the A5 is amazing) and low end cars like the A3 and A4.
@brownie,
One of the things folks ask when they are in my Legacy GT for the first time: “Is this an Audi?”
Must be the red leather seats.
dgduris:
I guess I can see how red leather might make it appear as if the car has caught on fire.
A number of things have helped them. Including:
* Restrained styling with a strong brand identity – smooth, elegant, flowing arcs
* A deserved reputation as the best interior materials and build quality
* A very successful ALMS racing career recently
* Some very good advertisements and tie-ins
* Being the underdog in the fickle “prestige arena”
* The R8. Can’t get a better tie-in than Ironman. Same for the S8 in Transporter
* Knockout designs on their recent efforts with the A4, A5, A6
* Improving reliability, particularly on the A4/A6. God, how they need it.
They have some things that will sink them and prove it simply a flash in the pan. Among these:
* Inability to introduce a competitive engine offering. See the new A4 for a car searching for an engine.
* Continuing or, God-forbid, worsening reliability
* Insistence on focusing on anything with a Q in it
@ noreserve
You didn’t like the new 2.0T in the A4? I was pretty pleased with it when I took one for a short test drive.
And how can you argue with more power than the old engine, and yet (supposedly) better fuel efficiency?
Does anyone have an example of Audi interior quality falling off as of late?
Very nice, except for those swoopy LED lights, which look like the automotive equivalent of way too much mascara.
I certainly think that they have improved the grill since its release in 2005. Flows much better now and actually looks very good. Especially on the new TT. Stunning.
Quattro helps too, better than BMWs X-Drive without the price BMW demands for their AWD system.
It also helps that Audi’s overall styling has not been ripped off by any other car companies.
Brownie: As an Audi owner, I can say definitively that not a single person in the world is impressed by my car (except maybe other Audi owners). People seem to think it’s a Subaru with leather seats.
Sorry to hear that, but everywhere I go since I got my 2004 A6 S-Line I get nothing but compliments. Even the cop who pulled me over for speeding last month (first one ever, ouch) complimented me on my car.
If someone can’t tell the difference between an Audi and a Subaru, well, not sure a car compliment would mean much comming from them :)
No_Slushbox: Oops, looks like I’m behined the curve.
Or Clarkston wants to get an X6.
The LeMans victories are pretty stunning too.
As much as I’m frustrated with Audi’s over-heavy cars, on a day to day basis, between the German three, Audi is really the only option. MB and BMW produce too many eyesores, their lines are too cluttered, the technology too obtrusive, and neither field a halo car as convincing as the R8.
Plus, FWIW, of the three, Audi is the only manufacturer to field prototype sports racers. And, to understate the obvious, with glaring success. All three field GTs, but outside of DTM perhaps, Ferrari and Porsche currently have that locked up.
Now, if only Porsche would take the LMP1 leap and bring the pain to Audi and Peugeot.
Speaking of Subaru, their sales actually increased over the past several month. And no, they aren’t giving out any discounts.
Maybe those Bimmer and Benz people indeed moved “down” to Audi and Subaru.
like.a.kite: Subjective personal comparison from the local auto show. The new A4 interior was a particular disappointment, even compared to other Audis. Overwrought and cheap to the touch, I thought. I’d still prefer it to nearly anything made by Mercedes though.
I’d compare the A4 interior changes to the Impreza’s interior metamorphosis. More styling and less substance doesn’t float my boat, but the trend is definitely there.
Wunsch :
February 17th, 2009 at 4:24 pm
@ noreserve
You didn’t like the new 2.0T in the A4? I was pretty pleased with it when I took one for a short test drive.
And how can you argue with more power than the old engine, and yet (supposedly) better fuel efficiency?
Well, I haven’t driven it, but I still have a problem with 211 HP in a $40K car. Especially a 4-cylinder. I don’t care if it’s turbocharged and a Ward’s top ten. I will give it some respect in the torque department – 258 lb/ft from 1,500 RPM is admirable. I still would like to see them have something to compete with the 335i without going into the S4 range.
Come to think of it, my 08 Accord V6 has significantly more HP (60), same amount of torque and gets better gas mileage (2) on the highway. That shouldn’t be the case. If you’re going to use a smaller engine, even turbocharged, it needs to provide more to justify it. It’s just out of place to me in that price range of a vehicle.
And back to the 335i… It has more HP than stated by probably 30. It is significantly quicker than the A4. And it sounds and feels great doing it. If Audi’s engine produced comparable numbers, fine. It doesn’t come close.
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.
The S-series is equivalent to the top of the line 3-, 5-, etc. series. The S-series is not meant to compare to the M-line, that is reserved for the RS group.
noreserve:
Well, I haven’t driven it, but I still have a problem with 211 HP in a $40K car.
It’s like the TSX in this regard – a nimble near-luxury sedan focused more on handling than straight-line performance. Besides, anything more than 211 turbo’d HP in a FWD car could make torque steer an issue.
I wanted to turn in my E46 M3 on something more comfortable but still exciting and luxurious, had to be a sedan. Drove the S6 and S8, the M5 had the shit for brains tranny and stiff ride, then I drove an E63. No comparison, bought the E63 and have enjoyed 48K trouble free miles. Audi is miles behind in the supersedan game.
I was just going over used car listings – I’ve been thinking of something to satisfy my middle-aged need for a sports car.
Something that caught my eye was the large number of Audis for sale and the low prices that were being asked for them. If this is any indication of what their resale value is like then this doesn’t bode well for their continued eminence.
Audi a Premium brand? Eh, since when has there been anything “premium” about a FWD econobox with a 4-cylinder engine? If there ever was any doubt we’re in a depression, this mindset suppresses it well and truly.
…or there is just that German > anythingelse TTAC mentality that whoever so far tried to question is crushed and annihilated within the first 4 counter comment postings.
phil :
February 17th, 2009 at 11:09 pm:
“Audi is miles behind in the supersedan game.”
—————————————
Eh – come again? The current RS 6 will (and already has) hand the M5 and E63 their lunch, on road or track, in any weather. To wit:
http://www.m5board.com/vbulletin/e60-m5-e61-m5-touring-discussion/131487-autobid-preview-test-bmw-m5-vs-audi-rs6-sedan-v10-biturbo-vs-mercedes-e63-amg-vs-bmw-alpina-b5s.html
Translation (done by a BMW-owning buddy of mine) of the article summary:
“ALPINA: Noble wood underscores the character of the cabin. Paddle shift buttons behind the steering wheel; Thanks to a blend of turbo and supercharger, the Alpina knows no lag and has incredible thrust out the chute; Understated exterior, it is the thin pinstripes and Alpina lettering on the front and back that set it apart; Standard equipment are the most comfortable seats that are great on long hauls; Touchy handling requires you to drive with feeling if you want to go fast; Sleek 20″ rims are classic Alpina; Not one to exaggerate, the Alpina can run to 322 km/h!
Audi: Notchback version now available for 2,250 Euros less; RS6 cockpit is the sportiest of the bunch; Double whammy with twin turbos the RS6 achieves the best performance numbers; The weblike plastic grill is also found on Lamborghini; Unity – the RS6 is the only test subject without offset wheels; Perfect electrically adjustable RS bucket seats adjust for width of back and hips and are available for 2,800 Euros. They provide the best lateral support; Longevity – for 8,200 Euros you can get a ceramic brake setup.
M5: Rev-monger. The V10 naturally aspirated engine only gets lively at higher revs, but then the sound gets sporty metallic; Cleaned up: the cockpit of the M5 is really streamlined. The sport button is programmable and on the right side of the steering wheel; Track-capable: on the loop, the M5 is extremely fun at very high speeds; Direct dial: the newest i-drive has buttons next to the knob; Standard 19″ offset tires on radial spoked rims; roped in: the M5 is electronically limited to 260 km/h; Luxurious: the sporty comfort seats are available with active functions.
E63: Overpowered: if you don’t want to be travelling sideways you need to be careful with the gas pedal; Well appointed: sport steering wheel, full instrumentation and sport pedals are all standard; Paddle shifters allow for manual shifting of the 7-speed transmission; Massive: the 5-spoke AMG wheels are standard; Dynamic: the seats offer a compromise between sporty and comfortable. Multi contour adjustments for hip and back offer more hold; Modest: you recognize the e-63 by the double exhaust, skirt and spoiler; Regulated: the urgent forward motion of the E63 is cut off at precisely 250 km/h. Too bad, but reasonable.
FOUR CARS: Despite not having a locking differential (optional for 2,995 euros) the Alpina can be nicely drifted; The all-wheel drive RS6 can only be forced into a drift, despite being tail-heavy; Driving sideways is most fun in the M5, thanks to the differential lock; The Mercedes will also quickly go sideways, and is not squirrely at the outer limits. Its strength is the long haul.
OVERALL ARTICLE: The Alpina is great as an urgent traveler that loves occasional side trips to a closed circuit track. The youngest and one with the most HP is the sedan version of the RS6, blessed with a twin turbo and power distribution that slightly favors the rear. It has fantastic bucket seats.
The M5 is the weakest in HP on paper, but the high-revving engine and locking differential make it feel just fine in this company. The optional active seats are a great compromise for travel comfort and performance when you blast the corners.
Last but not least the giant displacement E63 has nice seats for holding in the corners. It offers adaptive suspension without an up-charge. The price differential should not play a role in this category — nor should the fuel economy. The Audi is the most powerful, but also the heaviest. But it dominates all acceleration tests and comes in first in all the performance tests. The performance gap is minimal, though and really the difference in the cars is how the power is delivered.
The Alpina is ready to storm from the lowest rpm and stays strong through the band. The M5 is only ready to get down to business at higher RPM, but then it goes with authority and great sound. The E63 will also go at any RPM, but all the power being delivered to the rear wheels means you have to be careful. This is where the RS6 driver can relax because it will also explode at any rpm without any traction issues. The E63 is most comfortable on the Autobahn, as demonstrated on the track, where the indirect feel of the steering and the flex of the chassis and the least responsive transmission all make it the lowest handler of the bunch. The Alpina is the squirrely one of the bunch. As long as you don’t push it you are fine, but as soon as you do all harmony is lost, and the nervous steering requires a lot of correction. By contrast, the M5 sets a worthy example of how to handle a track. The chassis is taught, the transition from extremes is very manageable, and steering is very responsive. This car is great on long hauls as well as the track.
Last, the heavyweight RS6 is most impressive in the ease in which it pulls away from the competition, and how playfully easy the weight transfer is handled without oversteering. It handles every steering command willingly and with precision which sets the bar for fast and uncomplicated handling.The RS6 is the most effective at translating the massive power to the road and is the fastest on the track. A small consolation that it is also the highest in price.”
Gforce:Audi a Premium brand? Eh, since when has there been anything “premium” about a FWD econobox with a 4-cylinder engine? If there ever was any doubt we’re in a depression, this mindset suppresses it well and truly.
…or there is just that German > anythingelse TTAC mentality that whoever so far tried to question is crushed and annihilated within the first 4 counter comment postings
Gforce, for your refrence: An A4 2.0T sans all wheel-drive is nothing more than a comfortable, boring sedan that gets reasonable mileage. Sure the A4 is a good car in and of its own accord, but I’d rather have an Accord.
Thats from TTAC’s review of the FWD 2008 A4. Does not seem like “Germany can do no wrong” in the eyes of TTAC to me. Sure The FWD A4 is a well built sedan. But is not quite a premium car and TTAC seems to agree. But the FWD A4 is not representative of the Audi brand. The quattro models are. And as sales numbers are showing, Audis are most attractive to buyers looking in the premium car market. Which speaks volumes considering that other Brands, especially American, are getting hammered right now.
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’…