A5 Breeding a New Range of Audis

2008 Audi S5

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Last week, the world took its first look at the Audi A5 and S5, two coupes that will play a big role in boosting Audi’s image around the world. But underneath, the cars’ fundamentals are far more important to the brand’s future, as Audi CEO Rupert Stadler told TheCarConnection inGeneva.

The A5 and S5, in any other year, at any other automaker, would be introduced separately — as much as a year apart. Audi’s sending them off into the market simultaneously because of the steady stream of new Audis heading to market. In all, Audi launched 12 new models in 12 months in 2006, and this year will be equally busy, Stadler says.

The A5 comes on the heels of the supercar R8, which the young executive says is “the most emotional product Audi ever had…a real Audi sportscar.” The two-door shares some of its mechanicals with the Lamborghini Gallardo, and Stadler says that marketing the new supercar requires close cooperation with Lamborghini’s U.S. arm. Lamborghini, he explains, is the “cutting edge” sportscar, with volumes of less than 1000 units a year. With a slightly less powerful engine, the Audi R8 will be positioned slightly more mainstream – but likely north of $125,000, alongside the likes of the Porsche 911 Turbo.

Stadler says that now is the right time for a car like the R8 to arrive on the Audi scene — but the A5 and S5 have been anticipated even more. Audi’s been without a premium coupe in its lineup for eleven years, the Audi CEO says, while BMW continues to mine sales from its 3-Series and 6-Series and Mercedes from the CLK.

The A5 range will include the usual variety of models. To the A5/S5 lineup, Audi also will add an R version. While there are some model lines that will not have the ultimate-performance R versions — the A3 and A8, specifically — the S5 won’t go long before it becomes an RS5.

Stadler also hinted that a convertible version of the A5 is coming. Other Audi execs offered that when it arrives, the droptop won’t be a hardtop convertible. Among Audi’s engineers and marketers, a soft-top convertible is the near-universal choice, even though the technology for coupe-convertibles clearly exists within the VW Group in cars like the Eos. MORE—

A new generation — Q5 included

More importantly, the A5 is the first of a new generation of Audis to be built from a set of modular structures. The A5’s running gear will spawn the next A4, likely to debut at the Frankfurt auto show. Because those modular sets of components can be upsized and downsized, they likely will spawn the next A6, possibly even the next A8. Audi has exclusive first use of the modules, though eventually they will be spread throughout the VW Group, Stadler says.

Along with the A4, a new compact crossover vehicle, the Q5, will be drawn from the same component family. While the R8 was made for the brand, Stadler says, the upcoming Q5 is being added to the lineup for volume growth. The Audi CEO says that particularly in the U.S. , the Q5 will be depended upon to boost Audi’s growth. In America, the Q5 will join the A4 and the A6 as one of the brand’s most important volume sellers; Stadler says its sales volumes will be somewhere between those of the A6 and the A4, which together accounted for 66,078 of Audi’s U.S. sales of 90,116 units last year.

It will also drive home the point to consumers that Audi is, essentially, an all-wheel-drive brand. “No one will be able to sell more all-wheel drive in the U.S. ,” Stadler says confidently.

Going forward, Stadler says Audi is committed to developing other niche products like the A5 and the R8. But the question, he says, is whether the new vehicles will bring two-percent growth or five-percent growth. MORE--

Green machines

Diesels are sure to expand their presence in the lineup. Audi’s image has already been wedded to the technology, Stadler says. And in the U.S. , the Q7 range will be the place to convert buyers into diesel fans. Audi already plans to add a 3.0-liter diesel to the Q7 soon, and Stadler confirms that Audi’s new 4.2-liter diesel will come to the U.S. soon as well. As for the massive V-12 diesel recently unveiled for Europe? Audi execs suggest that it too is likely headed to the U.S. , giving Audi a three-diesel lineup in its SUVs.

In the future, there are prospects for a car smaller than the A3, but more radical changes in the U.S. market would have to create demand for an Audi in the compact niche. No matter what, “Audi must have an answer for all questions about the environment and global warming,” Stadler says, adding that “American people will be offered the right solution for their problems.”

And as always, Audi is keeping a U.S. assembly site in its reading pile. But with its current production footprint, Audi already can build up to one million units a year. As it pushes toward that number of worldwide sales, Stadler thinks Audi sales would need to reach 1.2 million before the brand would need to consider seriously a U.S. plant.

For now Stadler’s goal is profitability in 2007 — “at least as profitable as 2006,” he says. Audi’s brand awareness is still lower than its competitors, he knows, but his ambition is for Audi to become “a tier-one brand” that can truly match BMW and Mercedes in American sales, and in reputation.

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