Audi's gain, Toyota's pain

First quarter sales for Toyota are down 26.4 per cent over 2008, but Audi's sales have never been better. In a climate of economic gloom, the prestige importer is enjoying sales growth and the volume-selling brand is seeing its sales volumes on the slide.

Respective buyer sentiment counterpoints the way the market perceives the two brands. For years, Toyota has been the unstoppable brand with a car for every buyer and budget, but sales so far this year represent a significant downturn in demand -- although no more so than for most other volume-selling car companies.

Audi, the perennial underdog of the prestige import brands, has been on the ascendancy since the factory assumed distribution of the brand back in 2004 and is producing sales figures that are charting in an unusual direction -- up.

The prestige importer sold 2733 vehicles for the first three months of this year, according to VFACTS, building volumes by 5.2 per cent on the 2599 units for the first quarter of 2008. Key to the company's success for this quarter has been the A5 model, but the Q5 introduced last month and the revised A6 have both pulled their weight too.

"It proves that as a brand and a network, Audi in Australia is on the right path," says Joerg Hofmann, MD at Audi Australia. "Our growth is profitable and our investment with dealers in new facilities will continue."

In effect, Audi is benefiting from an expanding dealer network, careful management of the brand and a burgeoning product portfolio in which every new variant introduced picks up incremental sales. Pardon us for saying so, but that sounds a lot like the Toyota method of selling cars.

Car companies mostly had little reason to shout about their sales for the month of March or the first quarter, and were conspicuous by their inconspicuousness -- but not Toyota.

To the credit of Australia's number-one selling car company, the Big T went on the front foot, issuing a statement from the company's senior executive director sales and marketing David Buttner. Buttner expresses the opinion that sales will improve from this point forward and Toyota has done what needed to be done in the way of retarding forward ordering and reducing inventory levels.

He also believes the market is stabilising, as outlined in our earlier report comparing the parlous sales for the first quarter this year and the record-breaking sales for the same period in 2008 (more here).

"Toyota remains of the view that total industry sales will reach 850,000 this year with second-half sales being stronger than the first six months," said Buttner of the outlook for 2009.

"Fortunately, our local industry is not faced with the fall-off in demand being experienced in other countries. As a result, we are very likely to see demand gain pace here ahead of the rest of the world."

Buttner believes that falling interest rates, lower fuel prices and government intervention are all playing a part in demand gradually gaining.

"Business demand is also likely to be underpinned by the Government's 30-per-cent investment allowance for vehicles ordered by June 30," he explained.

"Toyota and our dealers are well placed as we head into the second quarter, having adjusted our plans in line with the market realities."

No doubt Toyota will take advantage of an improving market to reinflate new-car sales, but Audi's already there -- continuing to sell more cars when others are struggling.

This begs questions, such as:

Are Audi buyers now as loyal to their 'underdog' brand as Toyota buyers have been in the past?

Is Audi beating BMW and Benz with a game invented by Toyota?

What can the other prestige importers do to combat Audi?

Already, Mercedes-Benz has come out swinging with its 'Let's Talk' campaign and, as recently as this morning, announced reduced-price servicing for the C-Class. It looks like things are starting to warm up in prestige import land.