Hey Mac What's Up? - Audi Makes Run for Luxury Car Lead
By Mac Gordon
The Auto Channel
The battle for luxury car sales supremacy has reached a point of no return. The main contenders-Audi and BMW-have overtaken Mercedes-Benz in an unprecedented contest taking on global proportions in the struggle for affluent “trendy” buyers not only in the U.S. but also in key markets in Asia, Germany and the Americas.
It was former GM CEO Bunkie Knudsen who declared, “you can sell an old guy a young people's car but never sell a youngster an older guy's car.”
In other words, applying Knudsen's axiom on a brand basis, Audi has been tagged as a young buck's choice-Mercedes as the aging founder of internal-combustion engines and in the biggest surprise of all BMW lies somewhere in-between, lagging for the first time as “stale” and sliding in resale values.
Aiding Audi's campaign to win over owners or intenders among BMW, Mercedes and Cadillac brands are the upscale moves of their junior buyers.
Entry-level teen drivers are more and more inclined to trade up from VW Beetles and Golfs to Audi's, BMW Mini's to 3-Series, Toyota Yarises to Lexus and Honda Fits to Acuras than ever before.
The upward mobility swing is being felt “bigtime” by dealers. “Audi stalks BMW's Luxury Crown” has motivated automakers to press for costly investments in new facilities; profit-squeezing sales discounts, and penalties if hyped-up targets aren't met.
Audi CEO Rupert Stadler has ignited a “Beat BMW” drive in U.S. sales, eying a 200,000 target by 2018 (when VW's goal is 800,000,)
Audi dealers are under humongous pressure globally to modernize, but have been disturbed by allocation favoritism from Germany for dealer groups, as well as China, where it became No. 1 luxury-car maker in 2011 (an official car for the Communist leadership, together with siblings Porsche, Bentley and Skoda.)