Audi Racing Driving Brand Sales to New Record

LIME ROCK, CT – It’s a rare weekend for Audi AG as the best of its R10 TDI racecars only manages a paltry fifth-place finish in an American Le Mans Series event here.

Nevertheless, Scott Keogh, Audi’s chief marketing officer, says his brand’s racetrack success is helping it rack up record sales volumes and at higher transaction prices.

“Some brands have a place they call home,” Keogh says. “Our brand belongs on the track.”

Audi has won the prestigious Le Mans race the past seven years in Europe and has been the overwhelming factor in the ALMS since it entered the series in 2001.

Keogh says racing has been especially helpful in selling sports cars, such as the Audi S8, RS 4 and S6. It also is paving the way for Audi to boost its price range above the $100,000 level for its all-new R8 flagship, which goes on sale in the fourth quarter.

“We have two years of orders in the bank for the R8 because of our racing credibility,” Keogh says, noting Audi will sell only between 200-300 R8s this year.

“We want to make sure we keep it exclusive. The limited production of the R8 will limit sales of the sports car to no more than 800 units in a full calendar year.

Audi has two years of orders for new R8 sports car, due to brand’s racing credibility.

The R8’s base price with manual transmission will be $110,000. An automatic transmission will fetch an additional $8,000.

The long wait for the R8 also benefits sales of other models. For instance, one customer recently took delivery on an S8 when he was told how long he would have to wait for an R8.

The RS 4 also has been extremely appealing to Audi enthusiasts, Keogh says. “We put no marketing money or incentives on that car,” he reveals. “Racing gives us a street credibility factor for our more conventional sports sedans also.”

The German auto maker’s success in the ALMS also has provided the brand great credibility for its race-developed technologies. “It’s in the DNA of our brand,” Keogh says. “Racing helps us develop technology and new materials (for our road cars).”

Performance diesels, FSI direct-injection gasoline and aerodynamic advances were derived from Audi’s racing cars. The TT and A3 already use Audi’s sequential manual transmission developed for racing.

Audi has a “Stars and Cars” program to bring its racing successes to life with sales prospects across the board. An event is held in each market before an ALMS race, with 300-600 potential customers in attendance, depending on the size of the market.

“It tells customers we finally have the physical products,” he says. “We keep a tracking study of image attitudes of our brand nationally and in 16 individual markets,” Keogh says. “We see the same consistent progress in the fun-to-drive attributes and advanced technology of our brand (in the studies.)”

Additionally, racing is helping Audi to transform the diesel engine image from slow cars with dirty emissions to high-performance vehicles that are clean burning.

The R10 TDI is the only diesel-powered car in the ALMS, leading Audi to its seven consecutive Le Mans triumphs, the most recent last month. Keogh believes that will help Audi sell its 3L TDI powered Q7 SUV when it goes on sale in late 2008 or first-quarter 2009.

“Audi has performance credibility with any brand,” Keogh says. “Our product lineup can go toe to toe with anyone in the industry.”

This will propel Audi sales to another record year in 2007, he says.

Keogh declines to provide specific numbers but says Audi will sell more vehicles than the 90,116 in 2006. This year’s first-half sales were about 13% ahead of 2006, despite a slight dip in June.