Technology set to push aside old models and large dealerships
Mark Smyth spoke with the new head of Audi South Africa, Trevor Hill about changes in the industry
Taking charge of any premium brand at the moment is a challenge. The premium market is down 18%, in part because, like other segments, people are choosing to hold on to their vehicles for longer. Audi SA has suffered as a result but according to its new boss, Trevor Hill, the company is still managing to hold a 20% market share.
As a South African, Hill says he has always wanted to run the local operation, but until now he has not had the opportunity. In recent years he has been posted all over the world, but his placement back in SA is appropriate given that he regards himself as something of a troubleshooter.
One of the first things Hill is implementing is rather controversial though. Mercedes was heavily criticised for its decision to stop reporting its individual model sales figures, leading earlier in 2017 to BMW taking the same decision in protest at its German rival. Now Audi will do the same thing from this month.
It certainly makes analysis of the market far more difficult both for competitors and for industry analysts. It will also make it harder for anyone to assess the success of new Audi models, with Hill promising that his company is "not holding back on any new products. We will be bringing everything to the (SA) market."
This product offensive will be directed mainly at trying to take sales away from BMW. "Always our competitor is BMW," he says. "We cannot compete with BMW on price and volume as they build in SA, but our strategy is a quality product.
"I’m never going to sell as much as BMW, but I can sell better looking cars," he says.
Whether they are better looking or not, those cars will include the new A8, which was revealed this week, as well as every new RS performance model, but will also include the new electric vehicles (EV) the company is promising.
"You have to have electric cars or you’re not in the game," he says. He predicts that 35%-40% of new cars sold will be electric vehicles by 2025 and Audi wants to get in on that. Its first battery electric vehicle will be a SUV in 2019 under the firm’s E-tron brand, followed by the Sportback concept model.
Hill says they will identify specific dealers in SA to handle the E-tron models, but there remains the issue of infrastructure. Both BMW and Nissan gave up waiting for the government to fulfil its promises to provide infrastructure for EVs and went on their own. Hill says that there are no discussions with either of the two other car makers but he says he and the wider Volkswagen Group are willing to enter into discussions
EVs form part of what the firm calls its "DSU" strategy, namely digitalisation, sustainability and urbanisation, which Hill intends to implement in SA. Part of this is an e-readiness campaign and building more technology into vehicles which can be accessed subsequent to a vehicle purchase via apps.
Digital dealerships, similar to the first one in London, are also planned for SA. They will be smaller, with screens detailing models, virtual reality test drives and online configurators.
This is the opposite to the large "Terminal" dealerships Audi has been building. Hill says no more Terminal facilities will be constructed, instead there will be downsizing in dealerships with more technology.
As technology increases, it appears that the days of the large dealerships are over. Instead we can expect more interaction between the customer, the car and a virtual dealership.
That will undoubtedly change the face of the automotive retail industry.