Audi's new CEO Gernot Doellner must tackle these 5 problem areas

Audi, Volkswagen Group's cash cow, has been a problem that parent VW has been struggling with for years. Before VW Group's diesel-rigging scandal, which began at Audi, the brand aimed to pass BMW and Mercedes-Benz to become the top global seller of premium cars. Instead, Audi has fallen behind in key areas such as electric cars and in China, its biggest market.

To reverse Audi's decline, VW Group CEO Oliver Blume has given the brand a new CEO — Gernot Doellner, a former Porsche executive who, in his 30-year career with VW, worked alongside Blume.

Here are Audi's biggest problem areas that Doellner must tackle.

1. New products

Audi has not launched a major new model in years. While Mercedes has a whole range of all-electric cars on the market such as the EQS, EQS SUV, GLE and GLE SUV and BMW has the iX, i4 and i7, the market launch of the Q6 E-tron, the first of a new generation of Audi battery-electric cars, has been continually postponed, largely because the delays at VW Group's Cariad software subsidiary.

Doellner needs to ensure that the 20 new models -- half of them full-electric cars -- it plans to launch by 2025 are launched on time. As customers switch to EVs in increasing numbers, the brand's sales of combustion engine cars will suffer. Bringing structure to what Doellner's predecessor Markus Duesmann called the "largest model offensive in the company's history" is an absolute priority.

2. U.S. plant decision

Western companies are seeking to reduce their reliance on China, which makes the U.S., the world’s second-largest car market; important. Here, Audi must catch up.

Last year, Mercedes sold 350,949 cars in the U.S., BMW sold 332,388, while Audi sold just 186,875. Tesla's sales in its home market amounted to 491,000 cars. It is not yet clear whether Audi will build its own plant in the U.S., which would offer significant advantages, especially on tariffs. Doellner needs to decide soon because it will take years before production begins. Duesmann had recently announced an imminent decision on Audi's U.S. production. Now it's up to Doellner.

3. Making Audi respected again

Audi is not only behind its competitors BMW and Mercedes in model launches and sales. It also lags in customer perception as a premium brand. Audi is known for its good quality but, in other areas, it has not made its mark for a long time.

In China, Audi is increasingly perceived as a "civil servant's car," not as real competition for BMW and Mercedes. The rivals from Munich and Stuttgart are also ahead of Audi technologically. When BMW presents its Neue Klasse (New Class) software-led electric platform at the IAA auto show in Munich in September, the gap will become even greater for the time being. Doellner needs to position Audi more aggressively as a rival of BMW and Mercedes.

4. Upgrading factories for EV era

Audi's vehicle assembly plants will have to be converted to build battery-electric cars and also for digitized production. There is a lot of work to be done here. Audi's home plants in Ingolstadt and Neckarsulm mainly build combustion-engine models.

Production chief Gerd Walker has set up a Factory 360° concept for the change, which will be implemented in steps. Audi's five factories (or six if a U.S. plant is opened) need modernization and clear concepts to manage vehicle production for the future. Key tasks for Doellner will be keeping Audi's employees happy during the EV transition, modernizing the plants without losing any production and also holding on to Audi's boast of production excellence.

5. Finding a new Audi DNA

Audi used to be an innovative brand, with technologies such as TDI direct injection turbodiesel engine and the Quattro all-wheel drive and space-frame bodywork. Other innovations such as five-valve engines and Multitronic stepless transmission have been less successful but have shown that Audi dared to push technological boundaries. But that was a long time ago.

The E-tron all-electric crossover launched in 2019 wasn't a bad car, but its newer battery-electric models are based on technology from other VW Group brands --the E-tron GT was based on the Porsche Taycan and the Q4 E-tron is based on the MEB platform developed by VW brand. Recently, Audi has been looking in vain for innovative in-house developments. When it comes to autonomous driving, once the spearhead of Audi's technological ideas with the 2018 A8 sedan, BMW and Mercedes are ahead of the game.

Probably the most difficult and long-term task for Doellner will be to give Audi's engineers and developers the confidence to come up with ideas that change VW Group and cars that amaze customers. They have the resources and know-how for this. Doellner must bring them back into focus.