Why Audi is running rings around its rivals

Some years ago, Bartle Bogle Hegarty produced a clever, if risky, television campaign for its longstanding client, Audi. Shot in black and white (if memory serves) it showed a yuppie taking a new Audi for a test drive. He comprehensively runs down the car’s performance characteristics, hands it back unsold to the forecourt and drives away in his BMW.

Audi – wholesome, Teutonic, technically advanced – has always had a more discreet and understated appeal in the premium car market than its principal rival BMW. For much of the past 20 years, this cannot be said to have been to its advantage. Understatement often verged on the bland, as BMW powered ahead with unquestionably the most successful sports-saloon positioning in the world.

Now, however, Audi is looming large in the rear-view mirror. It is overtaking Mercedes, its more conservative rival in the premium car market, and actively challenging BMW’s pole position in the UK. Last year, it put on nearly nine per cent in volume sales, just a shade behind BMW’s performance, while Mercedes lost over 12 per cent. In the first four months of 2005, Audi has actually outperformed BMW for the first time (31,891 cars sold, against 31,331, representing nearly 12 per cent growth compared with a static position for BMW). Mercedes sales, meanwhile, dwindled to 25,252, a reduction of nearly 17 per cent.

There will be those (particularly in the BMW camp) who suggest that Audi often enjoys a relatively favourable beginning to the year. They will also point to the uplifting effect of recent model launches, such as the new A4, A3 Sportsback, A6 and RS4; BMW has unveiled the 1-Series, but has yet to experience the full benefit of its relaunched flagship, the 3-Series.

That said, Audi the brand has made a quantum leap forward that will not be easily gainsaid by its rivals. How has this come about? The Mercedes issue is to an extent self-explanatory. Corporate preoccupation with the Chrysler acquisition has allowed the manufacturer to take its eye off its prestige brand; the result has been a reliability problem challenging the loyalty of even its most stalwart customers (Stuttgart taxi-drivers). Where BMW is concerned, there may be problems in store arising from the growing ubiquity of the cars and a tendency to brashness of image.

But there is more to Audi’s success than siphoning off a few disgruntled Mercedes and BMW drivers. As former Toyota chief Mike Moran puts it, it’s not so much that BMW has done anything wrong, just that Audi has done a lot more right in recent years. Most perceptibly, it was the first of the three to realise that prestige marques (with the seeming exception of Porsche) cannot survive on just a few models. Its early and successful segmentation into the ‘cadet’ market (A3, A2) now seems to be bearing a dividend in the form of customers who are about ten years younger than the sector average – with all that implies for a ‘through life strategy’.

Mostly, however, Audi has advanced by careful, consistent improvements in quality and design and long-term commitment to branding. Never, in fact, has a success story been truer to its generation-old advertising strapline: ‘Vorsprung durch technik’.

Stuart Smith, Editor

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