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New Audi Chief Aims to Topple Luxury Leaders

“We want to be the definitive luxury brand.”

by on Jun.26, 2012

Audi of America's new boss, Scott Keogh, sees significant opportunities ahead.

Long an also-ran in the U.S. luxury market, Audi is aiming to topple the established upscale leaders, said the brand’s new American CEO.

The target is to nearly double overall sales to 200,000 annually – while making sure it captures a larger share of customers willing to spend $70,000 to $80,000 for new vehicles like the top-line A8, Scott Keogh, the new president and CEO of Audi of America stressed during his first press in the new job.

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“We want to be the definitive luxury brand in America and outsell BMW and Mercedes-Benz,” said Keogh, as he outlined the brand’s plans for the near future.

More than 30% of Audi’s sales are in C/D segment where vehicles such as the Audi A6, Audi A7, Audi A8 and Q7 command premium prices, Keogh noted. For a luxury brand to be successful on a sustainable basis and improve the residual values of every vehicle its sells, you have to be able to secure your prices, he said, noting that Audi spending on incentives has been steadily dropping.  In fact, it now gets sticker price for the vehicles on its showroom floors.

“We’ve added over $6,000 to our MSRP’s over the last two years,” Keogh noted, even as key rivals have been using more incentives to attract customers.

Audi sold a record 117,000 vehicles last year and expects to set another sales record for 2012 as it expands its share in the high import group where its chief competitors are Mercedes-Benz, BMW and Lexus.

“We think there is a lot more volume to be had in this market for this brand,” said Keogh, who insisted selling 200,000 vehicles is certainly within reach.

The marque’s recent sales success has prompted new investments by dealers, giving Audi a stronger position in key markets. Audi dealers now have 100 different construction projects in the works and new, modern Audi dealership have opened in places such as the center of Chicago, San Diego and in Beverly Hills, raising the brand’s visibility in critical markets where customers are willing to spend $70,000 or $80,000 on new car, he noted.

Keogh also emphasized during his presentation that Audi wasn’t about to back away from its aggressive marketing effort, which has helped draw more customers into the Audi showroom. “We’re going to continue taking risks using provocative advertising.

“We were once known as the quiet brand,” noted Keogh. But that’s changed and Audi expects to continue being bold and blunt in its communications with American buyers. American appreciate it, said Keogh, Audi’s chief marketing officer until being named President and CEO this month after Johan De Nysschen took a job as the new global CEO of Infiniti.

Ultimately new product has been at the heart of Audi’s turnaround in the past four years and it plans to continue to keep its pipeline full and fresh. For 2013, for example, it is bringing back the all-road, a wagon-like crossover, and making extensive changes to models such as the A4 and A5 as well as the sporty S4 and S5, which have been an integral part of the company’s revival in the past half-decade.

In addition, Audi also plans to bring out a diesel version of the A8 before the end of the year, according to Mark Dahncke, the brand’s product and technology manager.

Audi of America is also working on a range of products that will appeal specifically to American motorists – a strategy in line with that of its downscale sibling, Volkswagen of America.

Thus, manual transmissions are available in the 2013 A4 and A5 as well as the S4 and S5 in the U.S. even though they are no longer sold in Germany because of concerns about C02 emissions.

“It’s an emotional discussion,” said Barry Hoch, senior product planning manager. “Manual buyers are more connected to the brand,” he said, noting there’s an additional payoff: They also spend more on aftermarket parts for their car.

 

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