Dealers are 'key'
Audi boss in Australia, Joerg Hofmann, credits Audi's on-going dealer redevelopment and investment for the importer's run of new sales records since the factory assumed distribution of the brand in Australia from 2004.
Hofmann wants Audi to sell through "maximum 40 dealers", ideally, and to sell as many as 15,000 units a year. For his part, he sees his role in contributing to Audi's success as one of effective dealer support, describing the importance of dealer redevelopment as "key".
"You just have to make sure the throughput continues and the dealer makes money," he said at the Q5 launch earlier this week.
But even now, with the company's landmark head office and retail outlet, the Audi Lighthouse, nearing completion, Hofmann is not satisfied that everything that can be done to improve the outlook for dealers has been done.
"Even the workshops are too small at the moment," he concedes of the dealer network.
That said, Hofmann trots out the company line that new product is important too, which is plainly true.
"Investment in product will not change. If you don't have new product, you're in even bigger trouble," he said, recognising that new product development plays a part in pulling Audi through the current financial crisis intact.
Audi will open the Lighthouse at its Sydney location in August and it will be the largest facility of its kind anywhere in the Audi world -- in the near future at least. Costing the company $50 million, it's the largest single component of the $170 million Audi will invest in the dealer network this year.
Attack of the Benz: sales dive too deeply
Audi has enjoyed a string of annual sales-volume and market-share gains since Hofmann took the reins of the company, so he has the runs on the board to speak with some authority on the market generally, and individual elements of it in particular.
"I have to say, I was maybe a little bit surprised," he told journalists at the local launch of the Q5 this week, describing his reaction to the news that Audi had overtaken both BMW and Mercedes-Benz in sales for the month of January.
Benz bounced back in February as a consequence of the three-pointed star's everything-must-go campaign, named 'Let's Talk'.
Hofmann is wary of passing judgment on the endeavours of Audi's competitors in Australia -- having had his fingers burnt in the past -- but can't help himself where Mercedes-Benz's latest sales campaign is concerned.
"What I can say is we wouldn't have done it," he admits.
"What it shows," he continues, "is how complicated the market is here."
Apparently, Hofmann keeps Audi's head office fully informed of what's happening in the market, especially where it involves sales and marketing measures by competitors -- including the competitors' advertising campaigns. Audi's head office honchos apparently greet Hofmann's reports with some bemusement.
The 'Let's Talk' campaign may have cast a shadow over Audi's immediate plans to be the number one prestige importer this year, but Hofmann reckons that Audi's position in the market will stabilise in the number one spot within three to four years. And the company is aiming for "another record year" for sales, as well as increased market share in 2009 and "profitable growth".
Perhaps, with those targets in mind, that's why he's not so impressed by the Benz campaign.
Negative perceptions feeding negative growth
It seems to be a common 'fault' of MDs managing companies that remain profitable in the current economic circumstances; Hofmann has joined others (Mazda's Doug Dickson and Suzuki's Tony Devers, to name two) who are upbeat about the Australian economy.
Hofmann is amazed at the level of reporting by the media concerning Australia's 'recession'. As he pointed out, the country is yet to experience two full quarters of negative growth, so it's not even technically in recession yet.
"Look at Australia," he said. "All the banks still have good credit ratings."
"I firmly believe Australia is not too bad."
And if you were the head of a distributor in a country buying Audis faster per capita than any other country in the world, that view would be entirely understandable.
Audi's sales from 2007 to 2008 grew by 30.2 per cent. That growth makes Australia the fastest growing market for the German brand anywhere in the world. It has made the company's head office sit up and take notice, according to Hofmann. In turn, we've had Audi testing the Q5 in Australia ahead of its launch -- up to 30 per cent of local testing conducted offroad -- and the car arrived in the market ahead of its originally scheduled date, because Australia is a more important market in the Audi world than was once the case.
"We got the Q5 here almost three months earlier than anticipated," says Hofmann.
We did but see them passing by...
Hofmann's lieutenant, General Manager Corporate Communications, Anna Burgdorf, tells us that the company had planned to reenact the Transcontinental Crossing this year with the Q5. Previously, the company had introduced the Q7 to local journalists with the cross-country event and then subsequently invited foreign media to take part in another crossing.
Unfortunately, the 2009 event to welcome the Q5 was ditched for budgetary reasons. The previous crossing cost $1 million and there just wasn't enough in the kitty for another run with Q5. That said, there's little doubt that Audi would leave such an event in reserve for the future, given the strength of international media coverage the last time around.
A7's wild
Joerg Hofmann's favourite car of the moment is the A7. The vehicle (artist's impression pictured, more here) gets the seal of approval from the local MD, but is neither specifically confirmed for the local market nor even penciled in as yet.
"This one -- as an Audi guy -- is just beautiful," he told the media at the Q5 launch, but when asked whether the car will be sold here... and when, he back-pedalled.
"I can't comment. We still have to wait at least two years…"
Psssst... Q5 power steering story leaks out
You may have read elsewhere that the Q5 blotted its copybook itself during the local launch, when two of the 3.0-litre TDI cars experienced an unexpected malfunction in the power steering system. The two failures occurred less than a kilometre apart at the commencement of a bitumen stage on the third leg of the drive program, somewhere north of Yarrangobilly in NSW on Thursday afternoon. One of the cars was co-driven by our representative on the launch.
In the case of the vehicle transporting our man, the loss of power assistance was gradual, but for the other car, it was almost instantaneous. Inspection by Audi's technical guys that night revealed power steering fluid had leaked from a break in one of the hoses. Whether it was a break under internal pressure or from a rock thrown up as the car passed over has not yet been determined. For that matter, it may have resulted from some other cause altogether.
Since it's not unusual for things to go 'pop' during a media launch -- and the two incidents occurred in such close proximity -- we're reserving judgment until Audi can furnish more information.