KjellA

"The premium upper medium sector has a new champion car, according to highly respected corporate title Fleet News, which this week voted the Audi A4 the `Best Premium Upper Medium Car' in its Fleet News Awards for 2002."


Read more at link below.
This is an good example of where Audi is going and what to expect in the future.<ul><li><a href="http://news.kak.net/modules.php?op=modload&name=News&file=article&sid= 92">Audi A4 takes best premium upper medium car award</a></li></ul>

hisport

As always, Kjella, appreciate your thoughtful comments.

Having spent a good deal of time in Europe on business, I do agree that perceptions of Audi are somewhat different. Particularly in the 3 series / A4 range, Audi has a much better market acceptance in Europe.

In general, however, I feel that Audi is suffering from much the same identity crisis in both US and Europe. I can't speak for Asia.

Agree that the physical products are great, for the most part. Not so the ownership experience, at least here in the US.

To wit: I reserved a BMW 735 with Budget at Frankfurt in 1989. Upon arriving at the airport, no BMW. They gave me an Audi 200 instead. I was furious, having planned to test drive the then new BMW model down to Italy. I was ready to detest the Audi, as the Audi reputation in the US at the time was, well... detestable.

So, off I went, with business stops en route. By the time Milan rolled in sight, I was in love with the Audi. I bought a used 200 (Audi 5000 Turbo)for a song upon returning to the states, and have had a mix of Audis and BMW daily drivers ever since.

VAG has multiple brands. Each needs a clear identity, and a unique product/market position.

BMW and MB are single brand companies with product positioning by model series, not brand. BMW has implemented this much better than MB in recent years.

VAG brand identity and product positioning is a mess, IMHO.

If VAG and AoA would get their ducks in a row, launch the next generation A8/S8 now, and remedy the service/ownership issues, Audi could take a huge market share bite out of BMW (and MB). Instead, what they're doing is a muddle.

John

KjellA

You are using the near past and the current situation as a judgement of what to come, and that doesn't always give the right result. Try using the bigger picture instead!

I think you have problems seeing *why* VAG is doing what they are doing, from a business perspective. Then I think you fail to see where they are aiming.

The "brand confusion" you call it is a necessity to gain enough total market momentum to be able to do what they plan with all the brands. It will pass, it is a part of the plan.

They take a medium or lousy brand, and turn it into a high-quality winner in it's segment. The segment is general or not sharply defined, because that's how you build the brand, give it as broad acceptance as possible. Of course you get internal competition this way, but it is not bad for the VAG group, they fight internally to be the best brand. That sharpens focus, and adds total market share too.

They started with Audi 30 years ago, then followed up with VW 10-15 years later. Then Skoda and Seat more recently. VAG has done this into an art, no less. No other car manufactorer has done anything like it. Turning a negative brand like Skoda or Seat into todays very much appreciated and fine cars in less than a decade is nothing short of extremely impressive.

Ok, so now they more or less have the good brands they need to give them the total marketshare they want. So let's do some more wizardery, let's try to position them in a way that market competition between internal brands is reduced to a minimum. That is what VAG has started now. You will see the positioning clearer in a couple of years, but it started already a couple of years ago.

What you will see is that Audi will be the design brand. Focus on design, design, design and design. Then lifestyle, sport, technology, as a part of the package, but not main focus. It will be expensive, a piece of art. Not mainstream, no big market share. It will be very clearly separated from the other brands, and it's main competition in the future is hard to see right now. Might be Bimmer, but could be a surprise too. Could very well be Saab. Could be Cadillac or Chrysler, who knows?

VW will be the upper middle class brand, where Audi is today. This actually started years ago, with the current Passat and Golf/Jetta. Phaeton takes it further, next generation Passat and Golf/Jetta will follow up. Competition will be MB, Jaguar and BMW, amongst others. Volvo will probably want to be here to.

Then Skoda comes and takes VW's old place, as the good quality mainstream brand. Competition will be Ford, Chevy, Opel and so on.

Seat is the young and sporty alternative, targeted directly at Alfa Romeo. But a lot more promising IMHO.

All brands will continue to evolve, and it is hard to see the future. But this is basically how VAG sees it, with the addition of brands like Lambo and Bentley, that won't face much group competition in a while (but might get it from Audi in the future).

The biggest challenge I think they have is with Audi and VW. What they want with Audi is actually to build a segment that doesn't really exist today, at least not very well defined. A "design" segment. A great idea, other products have that kind of segment, but not cars, not much anyway. The problem is that it has to be something more than just great design, it has to be both exclusive, highly advanced and a good performer as well. So the other VAG brands will have to compete with that too.

This might be a challenge to VW (cheaper, more conservative, less futuristic), Bugatti (more pure sports) and Bentley (more pure luxury, more.. ehh, simply more), and thus might be a challenge to Audi too. Is "Design" enough to make a difference? Well, it certainly is in a lot of other products, so why not?

Obviously, it will take some time to get there, and in that timeframe you will see internal brand competition. Not a big problem really.

The biggest trouble starts if Audi doesn't succed in building this new design-focused brand, and VW taking its old place in the system. That could be a problem for Audi's identity. But I don't think that will happen at all. And I think a lot of todays Audi customers will drive a VW in the future, while Audi will attract new customer groups.

Try to see this complete evolution from 1970 to today and 20 years ahead, get the big picture, and you will se it is going to make a lot of sense. VAG is not confusing, they are probably the most focused company of them all. But it might be a bit hard to see. And by all means, they might of course fail totally. But I don't think so personally.