Audi Oz looks to 2020

Audi Australia has a new boss -- and he's wasted little time in setting his company's medium term strategy. Indeed, building on the German prestige marque's global Route 15, new Audi Australia Managing Director Uwe Hagen (pictured) has outlined the company's vision through to 2020.

There are no big surprises in the plan -- it builds on Route 15's aims to make Audi the number one prestige brand worldwide and in Australia by 2015, but adds an extra focus on customers.

"Route 15 is running for years now... [So] With the last [Audi Australia] annual management meeting, the board presented an additional strategy called Strategy 2020. In this strategy all the points of Route 15 are included for sure, but it also will show there's one central part coming into the strategy and that's our customer.

"We think customer satisfaction you have to achieve [in any business] but when you're number one there [has] to be something in addition... Something more the customer is expecting... We have to delight our customer... [So] Focusing on customer delight will be the pivotal aspect of our Strategy 2020.

"That's the centre of our work, it's our mission... We like to surprise our customers, we like to impress our customers and we like to offer personal care..."

Hagen says product will be important in achieving both his 'no 1' and 'surprise and delight' goals. He points to the company's plans to debut another 15 models across the Audi portfolio by 2015 -- plans that include the pocket premium A1 due to go on sale Down Under in Q1 of 2011. But he says he is passionate about the non-product aspects of the brand's business Down Under. He sees these are equally important to achieving the company's goals.

Hagen says Audi Australia is well ahead of its targets on its Route 15 road map. Despite increased sales volumes from arch rivals Mercedes and BMW, he's also still confident that the brand will achieve its 'No 1' status -- though perhaps not in sheer volume terms...

"The original idea was 15,000 cars [per year by 2015]. I can't give you the number we will achieve by the end of 2015 but I'm sure it is more than 15,000 cars," Hagen explained.

"We are ahead of our target. With the new products coming through the next years we see a huge chance to achieve a good part [percentage] of the volume in the Australian premium market. [But 'No 1'] it's a combination with a lot of other things... Volume is not our main focus..."

"We try to combine this [volume] growth with a form of quality growth -- it's not quantity we are only focused on, it's quality. We are doing this together with our dealers and other participants."

Audi Australia has 32 dealerships currently but that will expand to 42 by 2015. The renewal Australia-wide begun under controversial and outspoken past-MD, Joerg Hoffman, will continue under Hagen's tutelage.

Audi will seek to strengthen its rural dealer representation. The next two Audi dealerships to open will be in rural Victoria: Bendigo and Shepparton.

In Brisbane construction is about to begin on Australia's first 'E-terminal' -- an important step for the company to demonstrate its environmental leadership, opines Hagen. Audi's latest dealership concept, the E-terminal features significant solar power generation, low energy use concepts and water capture and recycling feature in its design.

With $117m spent by the end of 2010 (not including the E-terminal noted above), Hagen describes Audi dealers' local investment levels as "exceptional".

"It is [Australian dealer investment] really the benchmark compared to other markets. They have platformed the foundation for the [brand's] future"

Hagen says part of the 2020 plan is that Audi Australia will also step up its training and staff and dealer development.

Established in 2005, Audi's Centre of Excellence has tripled its throughput of apprentices for example. That ramp up will continue and cover both technical and non-technical (ie: sales, customer service, etc) disciplines, Hagen says. By the end of 2010 Audi specialist repair centres will number 13 -- up from five.

Hagen's shorter term planning must include an added emphasis on engaging customers at both ends of Audi's established market. The A1 will attract younger buyers and must be a positive entrée to the brand. At the other end of the spectrum the launch in September of the new A8 flagship will pose challenges for the brand as it takes on Benz's dominant (in sales terms) S-Class.

Hagen admits he expects some resistance to change, but says Audi will work hard to impress these buyers.

"You have to go to the customer in the C/D [A8] segment. In the smaller cars you can wait for people to come in [to dealerships]. But if you have a business card with a well-known name [brand] on it, you will get their time," Hegan opined.

He says Audi will look at "new strategies" to help overcome the A8's traditional poor performance in terms of resale.

Part of that strategy may be an added focus on Audi's used car 'carpark'.

"We have a huge chance to improve our used car business. I want to handle the used car customer in exactly the same way we handle a new car customer. They are still investing a huge amount of money in a purchase [like a used A8]."

Australia is a key market for Audi internationally, says Hagen. The fourth most successful market in terms of growth behind China, Austria and Japan through the GFC, it was also the best performing developed market in terms of market share growth.

From 2008 to 2009 Audi Australia grew its share by 2.9 per cent -- despite 33 per cent growth Audi China lost share in the same period.

"But you can't eat market share," Hagen quips.

"The Australian market is a focus market for our [Audi AG] board -- to see how our new product are running and [to see] how we achieve success in the market."

Hagen claims in terms of return of sales the company leads the pack both internationally and in Australia. Audi dealers' return locally is around 2.5 per cent on sales -- the best in the Australian industry according to a"neutral poll" he says and better than twice the average Audi operation in Germany.

"We trust in the [Australian] market; we invest in the market; we are totally convinced we will get a return on this investment," Hagen stated.

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