Audi's most important A4 ever

If the new A4 doesn't sell better than all of the models that have preceded it, then Audi Australia will be behind the eight ball -- simple as that. The perpetually third-placed German luxury carmaker is betting the farm on the expectation the new, predominately front-wheel-drive A4 range will pull unprecedented numbers of Australians into its dealers' showrooms. And that it will sell!

To date the best A4 year was 2006 with 2693 units sold. Accounting for around 40 per cent of local sales, this year Audi says it will deliver more than 3500 A4s, with more than 4000 the target for 2009.

In addition to moving total Audi sales beyond the 10,000 unit mark in 2009, the company is expecting to substantially boost the A4's share of its own model mix. The A4 will account for almost half of Audi's local sales going forward.

The new car will be the foundation upon which the brand will continue its double-digit growth, says local chief, Joerg Hoffmann.

"The A4 is an incredibly important car line [for Audi]," Hoffmann pronounced.

"What it [the 4000 and 46% target] tells you is how ambitious [we are for the A4] and how important the product is for us.

"This is the basis for our growth. It is the basis for the next record we want to achieve, so what we do today [launching the A4] is probably the most important event we have done.

"The next generation car will maybe only arrive in six or seven years. What we have is a unique challenge, a unique opportunity and we have to take it [the new B8 generation A4] and make it work," Hoffmann said.

Audi's total local sales have doubled since 2004, to around 7220 units last year. However, it remains fourth in the luxury car marketplace, behind Mercedes-Benz, BMW and Lexus. Last year the Japanese marque topped Audi in total sales -- but by less than 1000 units, however, Lexus' B-segment A4 competitor, the IS250, almost doubled the Audi's volume (4096 vs 2242).

By way of comparison, segment stalwarts Benz's C-Class and BMW's 3 Series (sedan and wagon variants) sold 4232 and 5795 units respectively.

This year has started better for the Ingolstadt marque -- despite the B7 model A4's 'runout' status. In the first quarter of 2008, 859 A4s have been registered, compared to 955 IS250, 1288 3 Series and 1765 C-Class.

January 2008 was Audi Australia's strongest month ever, with over 1000 units sold. March was its second best month Down Under. With 2599 total units sold in the first quarter of 2008, the maker is up 35 per cent on the same period last year.

In the most recent month's sales (March 2008), the C-Class topped the pile with 633 sales compared to the IS's 370 and BMW's 299 units. Audi registered 248 A4.

Hoffmann says Australia was the fastest growing market in the Audi world for the first three months of 2008 -- outstripping even China. He calls the company's target of 8500 units for the full year "conservative."

"We certainly should have a great year. We certainly should exceed 8500 cars. We certainly have another year of double-digit growth -- more than 20 per cent [growth], that's for sure," a confident Hoffmann asserted.

Hoffmann announced Audi Australia's plans to build 'landmark' dealerships and a new headquarters late last year (more here). According to the local boss, the company and its dealers will invest more than $150m by the end of 2010 to establish what he says will be a "benchmark network" in the Audi world.

Audi expects to commence construction of its new headquarters in Sydney's nearby southern suburbs next month. Located in Victoria Park, the 'Lighthouse' will cost around $50m and house Audi's corporate offices and the company-owned Audi Centre Sydney dealership.

Do the maths and the dealer group's investment is $100m. A big ask?

"We have at the moment 30 dealers in Australia and by the end of 2010 all of these 30 dealerships will be completely rebuilt," Hoffman told the Carsales Network.

"What we are doing here is we are establishing a benchmark dealer network for the world. We start from scratch.

"Why? Because you have heard about all the new product that is coming to the country [see below and also the above link]. Our dealerships are... some are alright, but they certainly will not be alright in any more than five years, because we just will be too small... And we need all the facilities to be absolutely premium -- the highest standards that reflect our brand values of prestige, premiumness and being luxury."

Hoffmann says the investment plan has the full support of the Audi dealer network and will not affect pricing of the models going forward. He termed the investment across the network "massive".

"What it clearly shows is everybody believes in the future of Audi in Australia. My dealers wouldn't invest that money, my head office would not invest $50m in a dealership in Australia, if they didn't believe it would work," Hoffman opined.

"It shows massive confidence and massive trust in the [Audi Australia] team and in the market potential. [It is] A big sign of optimism in the future of Australia..."

He dismisses the suggestion that Audi's local marketing and infrastructure spending was not in line with the commercial realities of the Australian market, however.

"I don't see that we invest too much in any area," Hoffmann told the Carsales Network.

"I believe our [level of] investment is based totally on commercial sense. We are in a reasonably alright financial situation, so we have a long term investment, a long term commitment and I don't see any area where we invest less -- we'd rather invest more in the future."

Hoffmann is confident the new A4 will take market share from its competitors.

"For sure [we will take share]. The [luxury market] will not grow without limits. I would certainly believe that our [new] A4 would have something in between 35 and 40 per cent conquest sales."

But the reality is the A4 can't achieve Audi's ambitious targets on its own. Audi's commitment to double its international model line-up to 42 models by 2015 will have a direct effect on the fortunes of the marque Down Under.

In short, Hoffmann wants more Audi models locally. Already he sees models like the A1 MINI-competitor and A5 compact SUV as potential winners Down Under.

"There are still a lot of niches left. Segments, sub-segments, crossover segments, where we still see a lot of potential... Where the Audi brand is not represented, but where we certainly will jump in."

"My goal is whatever we have available in the world should also come Down Under unless there is a restriction on the fuel quality.

"What I know [of], and what I know is in the pipeline under development, I cannot see a single product we shouldn't bring to Australia," Hoffmann said.