Special Coverage

New York Int’l Auto Show

NEW YORK – Audi plugs an important hole in its lineup with a car that is high on style and value and intended for performance-oriented luxury buyers.

The A7, initially known in concept form as the Sportback for its 5-door coupe-like body style, is launched here at the New York International Auto Show and goes on sale next month in the U.S.

The car is appropriately named to slot in between the A6, which represents Audi’s C-segment midsize entry, and the all-new A8, which holds court in the fullsize D-segment. “The A7 fits as the emotional center between these two,” Johan de Nysschen, president of Audi of America, tells journalists at the unveiling.

These three vehicles culminate years of development work on Audi’s modular “MLB” platform, which in German means Modularer Längs Baukastein, according to lead designer Ulrich Beierlein. The A6 and A7 are direct siblings from the architecture, while the A8 represents an extended version.

De Nysschen tells Ward’s he expects first-year A7 sales in the U.S. to approach 6,000 units, and that all three should combine for about 20,000 units annually.

Overall, his goal is for the A6, A7 and A8 to comprise 25% of Audi’s U.S. sales in the coming years. Today, the A6 and A8 combine for about 13% of U.S. sales, with the smaller A4 as the volume leader.

Through the first quarter, Audi has sold 1,873 A6s and 1,371 A8s in the U.S., according to Ward’s data.

Boosting sales in the upper range of Audi’s portfolio means catering to a more affluent customer base, which translates into better profitability, says Scott Keogh, chief marketing officer for Audi of America. “We think it’s smarter coming at this segment with three cars rather than just two,” he says.

Dramatically styled with a wide stance and a beltline that collapses inward to a smallish greenhouse, the A7’s distinguishing characteristic is a roofline that slopes sharply to the rear.

It shares many sporty styling cues with the A5 coupe. But unlike the smaller sibling, the A7 has four doors, plenty of room for two occupants in the back seat and flexible cargo storage with the rear seats folded flat.

In the U.S., the A5 lacks a full liftgate, but in Europe the hatchback is popular. Beierlein tells Ward’s there is growing demand from the U.S. for the A5 hatchback.

Keogh says the sleek fastback A7 targets executives who want to make a “power statement” by driving a vehicle that is more aggressively styled than the A6 and A8.

Although new to the Audi lineup, the A7 actually arrives late to the party, behind the Mercedes CLS (which debuted in the U.S. in 2005) and the BMW 5-Series Gran Turismo (which arrived in late 2009).

Based on the launch of the A5, Keogh says he is confident the A7 will draw in completely new intenders to the brand. People who bought the A5 also have cross-shopped more expensive Aston Martin and Porsche models, he says.

The starting price of $59,250 makes the A7 extremely attractive, Keogh says. “People initially look at this and think it’s an $80,000 car,” he says. “That is exactly where we want to be. We think functionality and high design can have a place.”

Keogh admits there was a lengthy internal debate about the stigma of hatchbacks in the U.S. and whether the A7 would be accepted. “But the truth is, you have to get the stunning car out there. Someone looks at it, and that debate ends like that,” he says. “That’s what stunning design does for you.”

Power for the A7 comes from the 310-hp 3.0L TFSI supercharged V-6, which has won a Ward’s 10 Best Engines award the past two years in the S4.

Also standard is an 8-speed Tiptronic automatic transmission and the latest-generation quattro permanent all-wheel drive, featuring enhanced torque vectoring.

Keogh says the goal of meeting 25% of sales with A6, A7 and A8 is attainable: An all-new A8 flagship launched in November and the all-new A6 arrives in early fall. So far, the A8 has boosted its segment share from about 5% to 10%. “We think we’ll get a similar effect with the A6,” he says.

The A8 soon will be offered in the U.S. with a 3.0L turbodiesel, and de Nysschen tells Ward’s he anticipates the TDI could make up 20% of the sales mix.

Audi has set a goal to double its U.S. sales over the next several years to 200,000 units. To get there, de Nysschen does not expect to add new dealerships beyond the current 277 stores.

“Our focus is not so much expanding our footprint but expanding the capacity within that footprint,” he says.

“The only exception, I would say, where we need to improve our coverage is in the South, particularly in Texas, where there are some opportunities for additional stores,” he says.

Audi’s market share in Texas is low, about 3.5%, same as it was in California several years ago before a concerted push with new stores. Today, Audi’s market share in California is 10%, de Nysschen says.