China Paces Global Growth, But Audi Also on Rise in U.S.

NEW YORK – Surpassing Germany as Audi's top market last year, China set a new first-quarter record for the German car maker with sales of 90,000 units, up 41% from year-ago.

But Audi sales also are booming in the U.S., where the brand is being repositioned as the most “aspirational” luxury choice, Audi of America President Johan de Nysschen says in an interview at the New York International Auto Show.

The B-car segment, represented by the A4, is the center of gravity for Audi in the U.S., he says. Sales of the A6, A7 and A8 also are growing.

Audi's increasing brand power is giving it more command over its retail pricing. “We've reduced incentives and dealer discounts,” de Nysschen says. “On a weighted average, Audi transaction prices are virtually the same as MSRP (sticker price).

“We have a trifecta of things going for us,” he adds. These include an increase in absolute price points, selling more expensive models and using fewer incentives and discounts to achieve volume.

De Nysschen says Audi expects to set a new sales record in the U.S. this year, exceeding 130,000 units.

Audi has 278 dealers who enjoy 3.3% return on sales, the executive says. “Audi is one of the most profitable franchises in the U.S.”

Dealers also are moving a fair number of pre-owned cars, selling 37,000 in 2011. “This year we'll match that,” de Nysschenn says.

“Customers like to buy our cars because of their strong residuals. We have the highest residuals (50% after three years) of any of the German brands.”

Audi is investing €11 billion ($14 billion) between now and 2015 to broaden its product portfolio, notes Peter Schwarzenbauer, in charge of global sales and marketing. “Our brand is appealing to a new generation coming into the market in the next five to 10 years.”

Schwarzenbauer predicts the luxury-utility-vehicle market will grow 50% by 2020. Audi is expanding its offerings in the U.S. by bringing in the Q3.

The German car maker also sees a big opportunity for the new A3, which will come in sedan form to the U.S. next year. “That car can produce big volume for us,” he says.