Audi Exec: Lexus “Doesn’t Resonate”

Understatement is out at Audi of America.

Audi has been growing in other parts of the world, notably on its home turf inGermany and in China, where its cars are popular with top officials in both politics and business.

"Understatement is inherent in Audi's brand DNA," noted Johan de Nysschen, president of Audi of America in an appearance at the Automotive News World Congress. "Yet we think it's time for Audi of America to stop being so understated and be a little more bold and little more American in telling our story here," added de Nysschen, who indicated Audi also was preparing to target Lexus in its quest for more sales.

"You have to be bold to be noticed in America - certainly, bolder and more aggressive than we have been in telling our brand story," he added.

"We've faced hurdles in this country gaining recognition for truly excellent products in our portfolio. We intend to remedy that this year through creative advertising and marketing. Our mission and aspiration in the U.S. is quite simply to be recognized as a 'Tier One' premium brand in the same light as Mercedes-Benz and BMW, as we already are in Europe and elsewhere around the world," de Nysschen said.

The German automaker also has challenged its digital ad agency, Factory Design Labs, to capitalize on the Internet's freewheeling landscape to explore new avenues to educate, inform and link to customers. "Eight-eight percent of Audi's buyers spend time on the Internet before purchasing a new car, the highest of any (manufacturer) in the industry," he said.

"Audi internationally has set new sales records and new profitability records every single year since 1992. We're earning our market share, not buying it, which is a philosophy we're holding to in the U.S.," he added. "This presents some challenges because this is the toughest market in the world and the most competitive. Incentives are always in play here - even if you don't see them and every manufacturer is forced to play the incentive game here," de Nysschen said. "The euro-dollar exchange rate situation doesn't make matter any easier," he said.

Audi’s effort in the U.S. requires a broad product plan, smart bold communications, and dealership growth, de Nysschen said.

“Just ten years ago, our lineup was four models and four derivatives, this year with all introductions, Audi will have ten models and over 20 derivatives,” he said. "This year is really the year of emotion for with the new Audi TT coming this spring and our fabulous new Audi R8 sports car this summer," which was designed to compete with the Porsche 911, he said.

"We'll keep new product coming," de Nysschen said. "We're introducing our third sports car, the A5 Coupe, later this year. It will be an all-new vehicle that slots in between the A4 and A6," added de Nysschen, who added Audi also is considering offering a smaller SUV.
"Audi is building a family garage. We don't want to be known as a brand of one-off vehicles but considered because we offer a portfolio of premium vehicles, which compete in segments that matter to American consumers," he said.

In addition, de Nysschen said Audi will continue to invest in the development of passive and active safety technology and will keep addressing the reliability problems that had dogged Audi in the 1990s. "The vehicles we're building today are as good as those produced by anybody,” he said.

In addition, de Nysschen also said Audi's long-term objective of reaching 1.4 million global sales by 2015 will require growth in North America.

Lexus is currently the leader in luxury sales in North America. However, Audi already outsells Lexus in other parts of the world by a significant margin. Worldwide last year, Audi outsold its Japanese rival 905,100 to 460,000 units. Audi sold 260,000 cars in Germany, while Lexus sold 25,000 vehicles in all of Europe.

"Lexus is really only a U.S. brand and one predominantly focused on SUVs at that. It doesn't resonate anywhere else in the world, even in its home market, where consumer response to the market has been lukewarm," said de Nysschen, as he laid down a challenge that is certain to be debated for months to come.

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