Tight supplies will keep Audi prices up, U.S. boss says
DETROIT -- Tight inventories will help Audi as the German brand works to boost its U.S. sales to 200,000 vehicles, Audi of America President Scott Keogh told the Automotive News World Congress.
Audi had a 30-day supply in the United States on Jan. 1, according to the Automotive News Data Center, with its Q5 and Q7 crossovers particularly hard to get. A 60-day supply is generally considered ideal.
Tight inventory tends to drive up prices. Keogh said he intends to keep vehicles in relatively short supply to avoid an oversupply that would force the brand to cut prices and sully its image.
"Dealers will always ask for more cars, and then the instant you have too many cars, boy -- the dealers will rapidly, rapidly turn on you," Keogh said. "So, if I was going to pick which way I would rather hear the dealers screaming, I would rather hear them screaming for more than to turn this valve off and give me some discounts."
Audi sold a record 139,310 vehicles in the United States last year.
"People were laughing at Audi a couple years ago," Keogh said. When Audi declared it would sell 1.5 million cars globally, "people said, 'You're crazy.' When we said we're going to compete with BMW and Mercedes-Benz, people said Audi was never going to get up there. Today, we're the second-largest luxury brand and an incredibly profitable brand."
Keogh, 43, came to Audi in 2006, when it was the seventh most cross-shopped luxury brand. Flagging sales had left many of the brand's dealers unprofitable and many of its stores dilapidated.
But the brand, part of Volks- wagen Group, has revived itself with a focus on high technology and cutting-edge style, and expects another record year in 2013, Keogh said. He said Audi could reach its 200,000 sales goal "sooner rather than later."
Keogh, Audi of America's chief marketing officer for six years, took over as president in June after the departure of Johan de Nysschen, who left to become the global head of Nissan Motor Co.'s Infiniti brand.
Company: Audi of America
Main point: Audi was almost an afterthought among luxury brands a few years ago, but a focus on high technology and cutting-edge style has helped it rebound.
Quote: “The instant you get into discount mode is the instant you wreck your brand, you lose pricing power, and you drive into the dark corners that many in this industry have been in the past.”
You can reach Gabe Nelson at firstname.lastname@example.org.