New Audi boss is the wheel deal

Looking for love? Perhaps you might like to try walking into an Audi dealership.

The new boss of Audi Australia, Uwe Hagen, has made it his mission to get up close and personal with customers. Indeed, in his first fortnight in the top job he visited all of Audi's 32 dealerships nationally.

"It was a whirlwind tour but for me this was crucial," he told the Carsales Network during his first address to the press in Sydney this week.

"Dealerships are in my blood. I told all of the dealer principals if they have a problem they can ring me direct. Don't sit on the problem. Of course, the answer may not always be yes, but at least they will know the true situation."

Hagen is sympathetic to dealer requirements because he ran three of Audi's biggest dealerships in Germany -- in Hamburg, Essen and Dusseldorf – for eight years prior to his arrival Down Under.

Before that, he worked at a consultancy firm that stepped in to assist dealerships about to face bankruptcy.

"I have some experience in turning dealerships around," he said. "There are already some differences between dealerships in Germany and Australia but really the fundamentals are the same. The customer is number one. That is nothing new."

He said Audi dealers were experiencing incredible growth -- the brand has tripled sales in the past six years -- but he wanted to ensure that the expansion didn't come at the expense of customer service.

"We still must deliver better service than our rivals," he said. "The car is one thing, but it has to be the overall experience."

He said he was "amazed" by the number of all-new Audi "terminal" dealerships in the relatively small Australian market.

Although Audi sales in Australia are a fraction of the global figure (11,000 out of 950,000 last year) Australia was the fourth biggest region for growth behind China, Austria and Japan.

Audi will expand the current dealer network from 32 dealerships to 42 by 2015 -- but he says the company has no plans to open another factory direct store. The $50 million "Lighthouse" (pictured) in Sydney is the factory headquarters as well as a dealership.

"First we must plug some gaps in our dealer network, then maybe we look at other opportunities," he said.

Hagen said his tour of Australian Audi dealerships taught him a lot about the local market -- and dealers -- in a short space of time.

He said in Germany, for example, an Audi dealership would sell 1.2 used cars for every new car sold. In Australia the ratio is more like 0.4 used cars for every new car sold. "So the dealers must work harder to sell new cars here."

Most German customers have pre-arranged finance; in Australia up to half the finance is written up at the dealership.

And it is common for large Audi dealerships in Germany to have their own smash repair workshop; in Australia crash repairs are out-sourced. That said, Audi is looking to increase its aluminium repair centres from 5 to 13 by the end of 2010.

He said Audi still ranked among the highest of all automotive franchises locally among dealers surveyed -- and the dealers made record levels of return on investment, banking up to 2.5 per cent profit of turnover.

He also refuted suggestions that Audi's phenomenal growth locally was coming at the expense of profits for Audi's wholesale division in Australia. "We don't announce the numbers but headquarters is very happy with our contribution to the bottom line," he said.

Meanwhile, Hagen's arrival has amounted to an unexpected reunion between him and his head of marketing in Australia, Immo Buschmann. Buschmann worked as a trainee at a BMW dealership in Munich run by Hagen in the 1990s.

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