Sweet Spot in U.S. for A3 Sedan, Audi of America Exec Says

NEW YORK – It’s a model that for years Audi of America President Scott Keogh has been asking and fighting for, and it’s finally going to be available in the U.S.

“The A3 is a sedan made for America,” Keogh tells WardsAuto in an interview here.

The 3-door A3 is popular in Europe, but the entry-level, premium-segment buyer here has gotten older and yearns for cars that are more luxurious and larger, he says. “That leaves a sweet spot for the A3 sedan.”

The car will have an enticing price point in the U.S. at about $30,000, compared with $42,000 commanded by the bigger Audi A4.

Keogh predicts the lower price of the A3 sedan will be attractive to the 50% of Audi buyers who come from the Gen X and Gen Y groups. “These buyers look to Audi now,” he says. “About 25 years ago they would look to other brands.”

The Audi chief admits it's a big struggle to make money on small cars. “It's very tough to make the math work,” he says. However, the A3 sedan will be built on Volkswagen's MQB chassis that's already used for 4.5 million units annually.

While the MQB platform normally underpins lower-priced models, the A3 won't lack for features premium car buyers want. “We poured technology into that car,” Keogh says, noting the demographic for the A3 sedan demands sophisticated technology, high fashion and the latest devices.

Keogh says it would be a mistake for Audi to offer a less-expensive car to these buyers. He predicts volume for the A3 sedan, which goes on sale in the U.S. next spring, “will be dramatically greater than for the current sportback model.”

Indeed, he believes the new sedan will be the third-highest volume leader for the Audi brand, behind the A4 and Q5.

Audi's phenomenal growth in recent years has been accompanied by an equally impressive increase the brand’s average transaction price. “In the last three years, it went from $42,000 to $52,000,” Keogh says. “It's one thing to set a price and another to hold the price.”

Audi also will launch its first plug-in hybrid model next year, based on the A3 sportback. The car currently has a 50% diesel take rate.