Volkswagen takes control of Audi in Australia

Volkswagen Group Australia (VGA) has taken control of Audi Australia in a move that the companies argue will strengthen the position of the three brands in the stable – Volkswagen, Audi and Skoda – and potentially provide a better deal for buyers.

There are no promises of price cuts, or any planned changes to individual dealer networks, or a reduction of model line-ups.

But VGA says it should have a stronger bargaining position with the individual brands’ headquarters in Europe, and that the overall result will be a leaner and more efficient operation in Australia.

Audi will also take the lead on electric vehicles in this market.

“Unification fortifies the position of these group brands,” said Michael Bartsch, managing director of VGA and the lead player in the new structure.

“In a market where all auto brands are importers, no national sales company will have the breadth of offering nor the sheer product strength of VGA.”

The plan for an umbrella organisation in Australia tracks back for more than a decade, and was originally intended to include Porsche, Lamborghini and Bentley in a giant VGA juggernaut.

Bartsch led an initial investigation on a fact-finding trip from the US, but the one-size-fits-all approach was rejected by the individual sales companies – with Porsche mounting the strongest push-back – and the plan was shelved.

More recently, with Audi struggling to make headway against Mercedes-Benz and BMW in Australia, the idea was raised again and this time it has received the green light from the highest levels in Europe.

“It’s all about the structural costs. From our point of view, it’s more of a structural change,” Bartsch told carsales.

“The brands each maintain their individual dealer network. Skoda is growing, so we currently have about 180 dealers across the group.”

But what about the fine details?

“We’re discussing all that. A lot of the details are still to be finalised,” said Bartsch.

“Brand integrity is at the heart of this. It’s all about the structural costs.”

The three brands already share back-office functions such as parts warehousing and distribution, but Audi’s merge into VGA could bring new synergies across other operational areas such as financial services, warranty, customer service, advertising, marketing and sales.

Last year, VGA also announced it would centralise its southern state training facilities with a new multi-million-dollar complex at Essendon Fields in Melbourne for Volkswagen, Skoda and Audi. Porsche also has a new training centre right next door.

This new Essendon Fields facility also serves as the state regional office for Volkswagen, Skoda and Audi.

Audi’s flashy Zetland headquarters alongside the southern feeder road into the Sydney CBD will be the new base for VGA, which puts a question mark on the future of VGA’s existing HQ in Chullora, in Sydney’s west, which is also its distribution centre.

Bartsch, an Australian who has been head of VGA since 2015, after working with Hyundai and Porsche in Australia before time with Porsche and Infiniti in the US, continues in the top job.

Paul Sansom continues to lead Audi in Australia, and said he believes the brand will prosper under the new structure.

“As a prestige brand, Audi has its own distinct identity in VGA and remains the group’s technological spearhead,” he said.

“Vorsprung durch Technik means progress through technology and Audi is set to continue its rich history of innovation by taking a leading role in future mobility.”

Bartsch also told carsales that “Audi will be the brand that leads VGA’s push into electric vehicles”.

Ryan Davies remains director of Volkswagen Commercial Vehicles, and Michael Irmer will still be the boss of Skoda.