LOS ANGELES -- Halfway through Audi's 10-year plan to go from a premium player to a top-tier luxury brand, U.S. boss Johan de Nysschen says the brand it hitting its key internal targets.
Transaction prices, inventory levels, brand recognition, consideration and residual values have all improved in the past five years, said de Nysschen, president of Audi of America, in an interview at the auto show here.
Audi has struggled to achieve the same status as Mercedes-Benz, BMW and Lexus in the U.S. market. But de Nysschen, who took over almost seven years ago, says that is changing.
"We have separated ourselves from other premium brands" such as Acura and Volvo, he said, "and the gap is closing to three leaders."
Citing mostly company data, de Nysschen claimed the following improvements:
-- Audi customers buy pricier models than they did in 2006, based on sales-weighted averages. In fact, Audi says it has closed the gap to a whisker of the average sales-weighted Mercedes transaction.
-- Transaction prices for Audis now are closer to the sticker than they are for Mercedes or BMW, meaning Audi has less discounting and incentives.
-- Audi's average transaction price in 2011 is about $5,000 higher this year than last year.
-- Three years ago, the higher-end Audi models, such as the A6 and A8, represented 15 percent of the model mix. This year, aided by the addition of the A7, the top end is 27 percent of the mix.
-- In 2006, when a BMW owner cross-shopped other brands, Audi was seventh on the consideration list. Now, Audi is the next brand shopped after another BMW.
-- Audi's residual values are climbing. Although Japanese premium brands still led the Automotive Lease Guide 2012 residual value rankings, Audi finished second to Mercedes among the three German brands. What's more, Audi won the most individual product segments. Audi had similar results in the Kelley Blue Book Best Resale Value Awards.
-- Among luxury customers, favorable recognition of the brand has soared in recent years.
Audi continues to battle shortages of inventory shipped from Europe. The overall brand had a 28-day supply on Nov. 1, but the Q5 crossover had just a 12-day supply, and the Q7 was at 14 days. Audi has lost 10,000 sales this year just because customers didn't want to wait for a car, de Nysschen says.
"It takes 11 days to offload the car off a ship, clear customs, prep it for shipping, transport it to a dealership and do the PDI," or pre-delivery inspection, he said. "That means that a dealer never has a Q5 to show a customer because they are going out as fast as they come off the truck."
Audi once again will advertise during the Super Bowl. But last year's commercials may have come too close to blurring the content with too much theater, de Nysschen says. He adds: "We need an advertisement that conveys the technological message around the product and supports our brand positioning but has a bit of theater."