World's largest Audi dealership almost ready

Audi is putting the finishing touches on its $50 million Sydney showroom, the biggest Audi dealership in the world. In fact, while builders were still readying the eight-storey building, Audi dealer staff and head office staff had already moved in, a week ahead of the official opening.

Although concrete dust, construction workers and their equipment are among the 100 or so new and used cars on display, the company says the final days are all going to plan.

The dealership (pictured) will be officially opened next Thursday evening by Audi board member, Peter Schwarzenbauer, and the managing director of Audi Australia, Joerg Hofmann.

The building, known in Audi-speak as the "Lighthouse", was funded by Audi of Germany, not the Australian subsidiary. It is expected to account for 10 per cent of all new Audis sold in Australia which, at the current rate, would see 1000 cars sold there in the next year.

The 16,400 square metre facility replaces a modest Audi showroom on a nearby corner in Roseberry, which was owned by Sydney's multi-franchise dealer magnate, Laurie Sutton. The Carsales Network understands that the Sutton Group plans to relocate a Subaru franchise there.

Audi boss Hofmann said the deal to take over the Audi dealership in that area from the Sutton Group was "amicable", even though the Sutton Group had not long renovated the dealership in Audi's new corporate design.

"We don't talk about internal negotiations but I can tell you Laurie Sutton is still a friend of mine," Hofmann said.

"It was win-win from both sides and there were no lawyers involved. We didn't involve a lawyer and it was a mutual decision."

He said Sutton was no longer an Audi dealer but "he might be again one day".

"If something pops up he may become an Audi dealer again one day. I promise you it was a good deal for both sides."

The Sydney Lighthouse is in a prime location, covering the wealthy inner Sydney and Eastern Suburbs markets. The previously modest showroom around the corner at Roseberry sold approximately 500 new Audis a year, Hofmann said.

He would not disclose how long it would take to recoup the substantial cost to build the dealership and head office, but he said the benefit of the Lighthouse was not purely financial.

"When I was in Germany [to get approval for the project] I said the billboard value was 1.5 million Euros a year," he said.

"We have 40 million cars pass the dealership each year. They see the brand, the architecture and perhaps they think to buy an Audi. You have to ask, how much does it cost to reach 40 million people?"

Hofmann said the Lighthouse was the biggest Audi dealership in the world -- even larger than the recently opened Audi Lighthouse in Shanghai, China -- and it is the first to become a head office as well as a dealership, he said. Combining the two would be "good for both sides".

"Retail and head office get to see what's going on in the other side of the business," he said.

"It gives our sales and marketing people a chance to get closer to customers, and the retail people to understand the bigger Audi picture. It's the best way to get market intelligence, we can just go downstairs to see what's going on."

Hoffmann said Audi is undergoing its biggest dealer restructure in its history in Australia. In the next 12 months, he said, seven of the 34 dealers are renovating or relocating their showrooms to adopt the new Audi corporate identity.

The Sydney Lighthouse is Audi's first factory-owned dealership in Australia. By comparison, rival German brands BMW and Mercedes-Benz have -- or plan to have -- factory-owned dealers in all the eastern capital cities. In contrast, Hoffmann said there were no current plans to build more Audi-owned dealerships in Australia.

"I will tell you, at the moment as I'm sitting here, there is no plan [to build another factory-owned dealership], but nobody knows in business what happens in five years. I may have a dream about something, but it's really -- believe me -- far, far away."

When pushed further on a timeframe, he said: "Let's get Sydney started first. I will never say never but I will believe there is potential outside Sydney."

When asked why carmakers like to establish factory-owned dealerships, he said: "The advantage is at least you have control of things 100 per cent; [customer] service, but also how the brand gets displayed and demonstrated.

"Also pricing, making sure the dealers don't discount and that sort of stuff, because in your own facility you tell them 100 per cent what needs to be done."

When asked if the rest of the Audi dealer network was nervous about rivalry from the showroom owned by head office, he said: "Before I officially went ahead [with the Lighthouse] I had face-to-face meetings with all our dealers and told them the vision of where we want to go.

"They immediately raised their points, [and said] make sure you don't put us against the wall, push cars [on us].

"I gave a commitment that we don't have any interest in one big Lighthouse facility in Sydney and the rest is bankrupt. We need all our dealers to be successful."

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