Q&A: Audi's marketing chief describes how premium brands are faring under Europe's new sales regime

Ingolstadt. Former BMW manager Ralph Weyler became marketing chief of Audi, the premium car unit of Europe's biggest carmaker Volkswagen, on October 1.

The appointment coincided with the start of the European Union's new block exemption regulations for car sales and repairs.

Weyler describes his plans to boost Audi by entering new markets such as the Middle East, Southeast Asia and Japan and by forging a close co-operation with dealers.

Q: Mr Weyler, what's the difference between Audi's marketing organization and BMW's?

A: There is more drive here.

Q: Is that not the case at BMW?

A: I wouldn't like to say that. But there is a difference between a company that just glides along and one like Audi that is on an upward climb. You need a lot more energy to gain more height.

A: Does that also apply to the sales organization?

Q: There is a lot to do worldwide. Our Bavarian competitor (BMW) sells around three times as many cars in the USA than Audi. Audi also has huge potential in the Middle East, Southeast Asia and Japan. We have to become more active than we already are and do a lot more work to realize that potential.

Q: Also in Germany?

A: Yes, definitely. We used to have a very dense sales network here. The structure has changed significantly since the new block exemption rules came into effect. Now we have a new sales and service network.

Q: What do think are the big challenges?

A: The new block exemption rules mean that we have to give a service contract to each business that complies with our servicing standards. We have to make sure a business reaches those standards not just as a one-off, but also on a permanent basis. That's what our customers demand.

Q: Your former colleagues at BMW probably have the same task.

A: Every premium brand manufacturer has to do this. And those whose sales organizations always had to focus on only one brand definitely have a slight advantage. Nowadays our dealers have a much more demanding clientele than they had a few years ago and they have to offer highest service quality.

Q: Is that why more dealerships representing the true nature of the market are now necessary?

A: It is not just about the dealer structure and high sales volumes: each part of the market needs a business of a suitable size. It is more important that quality standards are reached. That's a question of attitude and being more customer-orientated.

Q: Some Audi dealers believe the demands of Audi's sales department are too high and too expensive. They are returning their dealer contracts and limiting themselves to service.

A: Yes, there are situations like that.

Q: Shouldn't you to reduce your standards?

A: No, we cannot allow ourselves to do that. We will give the remaining dealers time to work with the contracts they have at the moment.

Q: Under the new contracts Audi has the right to take a more active part in a dealership. What is the reason for that?

A: A premium brand always develops from the city centers. That is why we have to be especially well represented there. Sometimes this is easier if the manufacturer gets involved in certain points. But this is not about competing with dealers: I am not a marketing boss who works against the sales organization.

Q: Then Audi will not step in against a dealer's will?

A: No. Forcing someone to do something they don't want to do has never been very fruitful.

Q: Will there be any more Audi dealerships in Germany?

A: We do not have any plans for a regular network. However, action needs to be taken in some city centers. And if the local dealer doesn't have the necessary financial power or is not interested in expanding, then I can imagine Audi setting up a dealership. That has to be decided on a case-by-case basis.

Q: What do you think about multi-brand dealers?

A: Developing a brand means making each brand distinctive. A customer doesn't buy a group product but an Audi or a Seat. I can well imagine a joint warehouse for spare parts or common logistics. But I can't imagine cars of several different brands in one showroom. Exploiting the market that way for quick success puts an individual brand's growth at risk.

Q: Audi's 2003 marketing costs were quite a strain on the company's balance sheet.

A: No manufacturer can avoid taking certain marketing measures due to the current weak auto market. But we will not take part in any aggressive discounting battles.

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