Frankfurt 2015 / Audi: Stable end-cycle A4 sales validate design strategy

Audi revealed the new generation A4 in Frankfurt

Yesterday I had the privilege to interview Xavier Benoit, Head of Communications at Audi France. As is the tradition on BSCB, the focus was on sales performance and strategies. Here are the best bits:

BSCB: Audi France sales are up 4% so far in 2015 in a market up 6%, and your best-sellers A3 (+2%) and A1 (-5%) are losing market share. How do you explain this year’s evolution?

Xavier Benoit: As far as the A3 is concerned the drop in sales is explained by the 3-door variant, a little older than the Sportsback variant which still represents 80% of A3 registrations and is handling itself a lot better. We also can’t discard the A-Class effect: Mercedes has come from nowhere in a compact premium segment that isn’t growing as fast as it used to, automatically triggering a slight reduction of all other competitors’ sales.

As for the A1, we are getting frontal competition from the new 5-door Mini hatch. Given the majority of our sales happens with the 5-door and that this Mini variant didn’t exist up until last year, the effect has been noticeable. Also, the urban SUV segment is really the one segment taking off at the moment in France and we are seeing this with our A1: buyers are starting to migrate away from the model, upsizing to a Renault Captur or Peugeot 2008. This is one of the reasons we are eagerly anticipating the A1-based Q1 SUV based next year to plug this gap in our range.

The Audi e-tron Quattro has been confirmed for 2016 and may be called Q6.

BSCB: Especially given your best-selling SUV, the Q3, is up 19% despite originally launching back in 2011…

Xavier Benoit: This is a clear illustration of the SUV segment continuing to progress in France: the Q3 is not getting out of fashion and continues to be appreciated. We will see how this turns out now that BMW has just launched a more SUV look for the X1, but it’s also true that the 2015 facelift has had an impact on CO2 emissions which has furthered its attractiveness in France. Here, cars are penalised for higher CO2 emissions and SUVs and this reason for consumers to stay away from the segment is now disappearing. It’s also a very important element for companies purchasing fleet, and over our entire range 40% of our sales are to companies – we anticipate 65% for the new generation A4 we unveiled at Frankfurt.

BSCB: In France the A4 is declining (-12%) but European and worldwide A4 sales are still up even though the new generation has’t hit dealerships yet…

Xavier Benoit: This validates our strategic decision to slowly evolve our design from one generation to the next. Despite its age, and despite the fact we revealed shots of the new model in June, we are not seeing drastic drops of company purchases awaiting the next model. We have calculated that our remaining stock of the ongoing model will have exactly dried out by the time we launch the new generation in end October. We are not seeing

Audi Q7 e-tron quattro

BSCB: Along with the Q1 slated for 2016, will your SUV offensive also include a Q2 or Q4 to the range in the next year or so?

Xavier Benoit: We have a confirmed Q1 launch for 2016 as well as a Q8 launch. The e-tron Quattro we are showing in Frankfurt as a concept has also been confirmed. Many call it Q6, but we can’t confirm its name yet.

BSCB: Lastly worldwide, you have just been passed by Mercedes in the luxury race and now rank third below also BMW. Disappointed?

Xavier Benoit: Honestly when you see how tight the race is worldwide (1.21m for BMW, 1.19m for Mercedes and 1.18m for Audi after 8 months), chances are the ranking will change relatively often. We are not worried if our competitors want to stress the fact they have passed us. We know where we are with the A4 product cycle and this model is still our worldwide best-seller. So we are happy with the sales performance this year as global sales are not dropping for this nameplate even though its replacement is imminent. We don’t want to be Number 1 for the sake of being Number 1. We want profitable sales.

BSCB: Are you worried about the current situation in China?

Xavier Benoit: The weight of China in our worldwide sales remains inferior to Europe, and even if at the moment we are seeing a clear slowdown, there is no panic. What prevents us from being Number 1 in the world is the U.S. market but we are catching up fast with sales up 12% so far this year. (BSCB: vs. +6% for BMW and +8% for Mercedes).