Audi: No Plans to Go Below A3 in U.S.

DETROIT – How low can Audi go?

No further, at least not in the U.S., according to top executives, who say the brand isn’t planning any entries below its least-expensive, smallest and so-far highly successful A3 model, re-introduced to the market last year as a 4-door sedan for the first time.

“You won’t see us go down-market more,” Luca de Meo, head of global sales and marketing for Audi, tells the Automotive News World Congress here. “You’ll see us go upmarket more. We’re trying to take our share in the upper segment.”

Outside the U.S. Audi does sell the A1 model, positioned below the A3 in size and price, and there is an A1-based Q2 CUV due later this year. But that is likely to be it for the German luxury-vehicle maker, which appears intent on capturing share at the more-lucrative upper end of the market instead.

Audi’s movement further up the pricing scale was signaled at the Los Angeles auto show in November with the unveiling of the Prologue concept, expected to form the basis for a new range-topping A9 model rumored in the works for some time.

But Audi won’t stop there. At this week’s North American International Auto Show, Audi CEO Rupert Stadler tells media at least two more new top-level models are in the works, including an addition to the Q CUV lineup that would slot above the current Q7.

Audi will spend €24 billion ($30 billion) over the next five years on product development, Stadler notes, citing work on automated vehicles, the connected car, fuel-economy improvements and “new large-model additions.”

Audi of America President Scott Keogh says the brand is right where it wants to be on the low end with its current U.S. lineup.

“We’re good,” he tells WardsAuto in an interview at the auto show, noting the A3 sedan has been in the market less than a year. “We (also) have the Q3, which has been a runaway homerun and the (A3) Sportback will be coming back (as a plug-in hybrid model).

“So that gives you a good pocket of vehicles. And I think we’re well situated in that segment – definitely.”

Some 75%-80% of A3 buyers never have purchased a luxury vehicle before, a percentage higher than Audi anticipated. “That’s quite a robust number,” Keogh says, pointing out the new entry didn’t erode demand for the bigger A4 or Audi brand value overall.

A4 sales fell only 2,700 units last year, even though the car is nearing the end of its current lifecycle. A replacement is due this year in the U.S.

Audi U.S. sales totaled a record 182,011 vehicles last year, up 15.2% from 2013. Worldwide, Audi delivered 1.74 million units in 2014, a 10.5% increase from the previous year.

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