Audi plans to kick off sales of the new A3 early next month with events at every dealership in the U.S. and Scott Keogh, president of Audi of America, says he is looking forward to the upcoming duel with Mercedes-Benz for buyers looking for a luxury car starting a shade under $30,000.
There’s little doubt the market is interested considering the rousing demand for the 2014 Mercedes-Benz CLA since its introduction last autumn. In fact, Daimler AG chief executive officer Dieter Zetsche recently said the Mercedes biggest challenge right now is getting more cars to sell since demand is so strong. And Audi’s rival says about 80% of CLA customers are new to the Mercedes brand.
But Audi thinks it can fight back with the next-generation A3 which made its debut in Europe last year but is only now coming to the States in sedan form. And much as the CLA has lifted the fortunes of Mercedes, which last year became the luxury market’s top-seller in the U.S., Audi hopes it can lift itself out of its distant third-place status, a seemingly realistic goal considering it became the world’s best-selling luxury brand for the first two months of 2014, nudging aside BMW.
(Audi is the global luxury sales leader…but can it hold on? Click Here to find out.)
The luxury arm of Volkswagen AG plans an old-fashioned splash when the new 2015 A3 makes its official debut at the 268 Audi dealerships across the U.S. with a special launch party on the night of April 3.
“There is no lever we haven’t moved to make sure the new A3 is a proper Audi,” Keogh said.
The A3 will help Audi reach the booming market for small and affordable luxury vehicles, and though the typical vehicle will likely roll out of showrooms for thousands more than the under-$30,000 base, the new model will still come in significantly below the current, $52,000 average transaction price U.S. buyers are paying for an Audi – a figure that has risen $10,000 over just the last three years.
And that could help it reach an entirely new group of buyers, Keogh said – much as Mercedes has experienced. But Gen-Y and Gen-X motorists already make up 46% of its U.S. customer base.
The 2015 Audi A3 is not meant to be the luxury equivalent of an econobox. It comes with a long list of standard equipment, including a panoramic sunroof, leather seating surfaces, a full-size spare tire and the latest connectivity and infotainment gear, much of it developed at parent Volkswagen’s electronics lab in Silicon Valley.
The new A3 will be the first car in the U.S. with 4G LTE capability – General Motors planning to launch its own 4G service next autumn – and will come with a navigation system using the same Google Earth-enhanced maps now offered in the top-line Audi A8.
In addition, Audi technical experts have found a way to insure the car’s infotainment and connectivity system can be updated every year or so with a visit to an Audi dealership. In the past, updating the electronics in a car required replacing the vehicle’s electrical architecture, which was an expensive proposition, noted Filip Brabec, who is in charge of product development for the A3.
“It will be more like upgrading the graphics card on your PC,” added Peter Gel, the executive director of the VW electronics lab in the San Francisco suburb of Belmont.
The A3 hits the U.S. market at a critical time for Audi which is planning to roll out all-new or updated models this year alone – including the next-generation TT unveiled during the Geneva Motor Show media preview last week. In all, the maker plans to invest 22 billion Euros, or $30.4 billion, over the next five years in its bid for luxury sales leadership.
(Click Here to check out the next-generation Audi TT.)
Audi dealers are anteing up, committing more than $1 billion to more than 100 renovation and construction projects. One Texas dealer recently opened a new, $25 million, seven-story dealership in the center of Houston that is the most expensive Audi facility in the country.
(Audi drops its top with new S3 Cabriolet. Click Here for a closer look.)
Keogh noted Audi sold more than 158,000 vehicles in the U.S. last year, a big jump though still well behind Mercedes and BMW. With the introduction of the new A3 sedan — and variants such as the wagon-like Sportback and diesel-powered versions due next fall — as well as the new TT, the prospects of Audi’s sales reaching 200,000 units before 2020 are looking bright, he said.
(Paul A. Eisenstein contributed to this report.)