Audi cruise set at 16K a year

AUDI has surprised industry observers with the announcement that somewhere “between 15,000 and 17,000” is the upper limit for any luxury brand’s annual sales tally in Australia if they want to be profitable and remain exclusive.

This effectively puts paid to the company’s oft-publicised pledge of becoming the number one luxury car brand for sales in Australia.

Yet Audi Australia managing director Joerg Hofmann denies that this is an admission of defeat to BMW and Mercedes-Benz, stating that he is more than happy to see Audi right up there with the competition sales wise while making a profit and leading in customer service and satisfaction.

The three latter points, Mr Hofmann suggests, are in danger of being severely compromised if a luxury car-maker strives to exceed 16,000 or so sales a year in a new-car market the size of Australia’s – which is expected to hover around the million-unit mark for the next few years.

Mercedes-Benz has already breached the 17,000 barrier so far in 2009 (although if you take trucks out its total tumbles to just more than 13,300 to the end of November) while BMW is expected to also end the year past 17,000 sales. Currently, its volume is standing at about 15,500.

Left: Audi Australia managing director Joerg Hofmann.

Furthermore, BMW has already said that by 2015 it will sell more than 20,000 vehicles in Australia to maintain the number one luxury passenger car crown.

Audi’s year-to-date volume is 10,667 units, a record for the brand in Australia, and the 60th consecutive month of sales growth.

According Mr Hofmann, Audi will end 2009 with sales well into the 11,000s – a stark contrast to 2004’s 3500 unit amount.

He believes that Audi will hit the 15,000 annual volume marker by the end of 2013, fuelled by the release of the BMW Mini-chasing Audi A1, the next-generation A3, A6 and A8, a raft of new niche models such as the A5 Sportback (out in January) and A7 coupe-sedan, and the completion of a nationwide dealership overhaul.

“I would rather (see it at) about 15,000 cars a year,” Mr Hofmann told journalists at the launch of the TT RS and S5 Cabriolet in Sydney this month.

“Other German brands have announced they want to go to 20,000 cars or whatever … but I don’t think this won’t happen immediately unless it is with discounting or at the expense of brand image.

“In every market there is a cap for a premium brand, and if you go beyond it you either lose money, or you have to discount and buy the extra volume.

“I believe that at around 15,000 cars we will be able to hold our position … and move forward with customer satisfaction … and if you go over that premium brand limit you lose a competitive edge.

“And at 15,000 cars a year we are doing (our bit) for Audi AG’s global plans for 1.5 million cars that Audi wants to sell globally (by 2015).

“15,000 (units) is where we should comfortably be. I want to leave it there and not go further.

“I believe we should be there by about 2013.

“And 15,000 units (is not waving the white flag to our competitors) … it is pretty much in there, in the competitive set … we are in the top group.

“But … we will keep challenging and we will keep chasing (our competitors).”