Audi’s happy marriage between Italian passion and German dependability
Audi has steered its own course against the trend for falling sales
Audi has bucked the global and European sales trends, posting record sales year-on-year for the past 16 years, if you ignore the aberration that was the global dip of 2009. The VW -Group owned brand delivered 1.4-million cars to eager customers, worldwide, last year, itself a record for the company and brought home a significant €6-billion in overall profits.
That's a remarkable number, representing 40 per cent of the vast VW Group's profit for 2012 delivered to the bank's door by a premium badge operation that represents just 12 per cent of the total group sales. Remarkable barely begins to describe it, especially against a backdrop of continuing uncertainty in the world's car markets, and downright gloom in Audi's traditional European home markets.
Last week, in front of the world's assembled media, Audi's chairman of the board, Rupert Stadler, made a strong overtone that the firm wants to shift the centre of its gravity away, even if only slightly, from its traditional, rational, Bauhaus appeal and seek instead something of the Latin passion that fuels such enthusiasm amongst the world's car nuts.
Part of that shift is clear from Audi's own group-within-a-group inside the VW structure. Audi is responsible for the running of Lamborghini (as it has been since 1998) and now also has high-performance motorbike maker Ducati and Italdesign, the design studio established and owned by the legendary Giorgetto Giugiaro, under the control of the Audi Group. Indeed, the gala event that preceded the delivering of Audi's annual report, Giugiaro himself appeared on stage with a 40-year-old concept that the designed for Audi - the Ace Of Spades; a sharp-edged, 1970s looking car that clearly gave inspiration to the likes of the early models of Audi 80 and the original Volkswagen Scirocco.
It's to Giugiaro and Italdesign that Audi seems to be turning for its future styling with Audi design boss Wolfgang Egger saying that "there is a lot of interchange between us and Italdesign now. The design must be in line with the genes though. You are designing for the four rings, not for yourself." Clearly then, Audi is not going to tear up the rule book of subtle styling that has won it so many fans and sales, but it seems as if a little more latin passion and a few more curves are on the way. Giugiaro himself said that "The definition of a successful vehicle design? Simple; a beautiful car! It's the things you perceive, possibly sub-consciously, but it is something that we do with a lot of enthusiasm; the drawing, the shaping. It's what should excite people, no? Working together with Audi is about finding the person with the biggest message to say."
Audi is not just looking to Italy for styling inspiration though. It's also turning to its Latin acquisitions for technical know-how in the design of lightweight cars. "Lightweight is crucial for vehicle performance and Ducati is a pioneer in lightweight motorcycle construction" said Audi technology guru Wolfgang Durheimer when asked what the Audi-Ducati linkup was all about, and doubtless it is true, although Rupert Stadler later alluded to the fact that Audi's dormant sub brands of DKW and NSU once made it the largest maker of motorcycles in the world, so there's little doubt that the purchase of Ducati was partially to allow Audi to fight fellow Bavarian rival BMW on its two-wheeled turf.
Light weight seems to be the key to the Audi-Lamborghini partnership bearing fruit too. "For a decade at least, since Mr Walter Da Silva is on board, he is giving an influence to design to all the brands in the Volkswagen group. So this is the message we send out - Italian esprit with German engineering,” said Durheimer.
"We are a spear-head in the lightweight materials, carbon fibre, so we have an expertise which nobody else has. We're geared for small production but we have more than 30 years of knowledge in terms of lets say small series production, we are the benchmark. And it's clear that being a spear-head, has a positive effect in terms of image, and this is something that is difficult to express in terms of money and in terms of synergies."
While we eagerly await the final showroom results of a mixing of German technology with Italian flair, Audi is pushing hard ahead on its twin fronts of technology and aggressive sales and marketing campaigns.
Rupert Stadler demonstrated a prototype of an Audi A7 fitted with the new Piloted Driving system. A self-driving car, the A7 crept on stage at the beck of Stadler's mobile phone, using a specially designed app."It's all about making like a little bit easier all the time" he said. "An Audi driver wants to be driving in a sporty, convenient and environmentally friendly way. This system is more than just a means to an end. It is always up to the driver to make the decision to use the electronic auto-pilot."
Quite apart from the potential convenience aspect of a car that can drive you when you don't feel like driving and head off and park itself when you get home, Stadtler made the point that the system is designed to help future Audis integrate more closely with future transport layouts, keeping Audi one step ahead of the environmental lobby. Wolfgang Durheimer chimed in on Audi's future environmental performance saying that he sees the recently launched E-Tron plugin hybrid as the most significant way forward in reducing vehicle CO2 emission. Like many car makers recently, Audi seems to be backing away from pure electric vehicles. "Plugin hybrid is the clear winner in the efficiency stakes" said Durheimer. "It's not just a transitional system, they'll be with us for a long time. Fuel cells? Our assessment at this point in time is that there is no economic argument for them. There would just be insufficient volume. Fuel cell is potentially very interesting for stationary systems though I would say. Powering your home for instance." Durheimer also confirmed that a new ultra-eco-friendly Audi A2, thought to have been cancelled, could yet be built, albeit in very small numbers.
Audi is also pushing hard on the quattro button, seeing its heritage in four wheel drive technology as yet another selling point as both BMW and Mercedes expand their 4WD offerings. Audi Ireland is especially keen to start promoting the quattro brand rather more enthusiastically. "We currently sell around 15 per cent of our models with quattro" Neil Dalton from Audi Ireland said. "But our intention is to increase that share. It's what defines the brand, quattro is a big part of our DNA. We had some success last year with our "Ireland - Land of quattro" campaign and we want to get the message across that it's not just for two days of snow and ice in the winter, it's also all about performance in the 220 days of rain that we get."
Part of that quattro push will obviously centre around SUV models and Audi is expected to grow its currently three-strong Q3, Q5 and Q7 range into new niches. Stadler dropped a big hint of future plans at the press conference when he said that "Today, every fourth premium automobile sold is already an SUV. By 2020, it will probably be every third. This is why we are creating a wide range; more sportiness, more variety, more profile, lower consumption."
Stadler later angrily defended Audi against accusations that it was quietly rowing back on its plans to build 2-million cars annually by 2020, and be the world's No.1 premium car brand. Certainly there was little mention in the official briefings of such ambition, though it has been often stated before. Stadler bristled at the suggestion though, and confirmed that Audi was still aggressively chasing both targets. A little Latin passion from the normally reserved Audi chairman.
Even given the global uncertainty over national economies, the Euro, environmental concerns and significantly high unemployment levels in the EU and USA, it's very hard to see anything stopping the Audi gravy train. A new Audi is currently being sold every 22 seconds worldwide, the brand is planning to open the equivalent of one new dealership in China every week in 2013 and new factories, in both China and Mexico, are currently under construction.
The only question mark is over the burgeoning Italian influence at Audi. Will it propel Audi to new heights of success, creating a sense of clear separation between Audi and its German competitors at BMW and Mercedes-Benz ? Or will buyers prefer to stick with German seriousness over Italian passion?