Fewer derivatives and more hi-tech dealerships move Audi into 4IR
I’ve always wondered how deep the rivalry runs between top-tier German automotive brands Audi, BMW and Mercedes-Benz. Despite their public competition, do they share a patriotic camaraderie?
Trevor Hill is head of Audi SA and though born in SA, he spent a good portion of his Audi career in Germany. He pours cold water on my theory. “The rivalry is real. I have on many occasions been subjected to wry commentary from rival brands putting down Audi as nothing more than ‘that brand from farmers’.”
Ingolstadt, the home city of Audi, is known for being an agricultural heartland.
Phuti Mpyane: Does this then explain Audi’s firm beliefs in quattro, which would be an essential tool in farming?
Trevor Hill: No, not at all. It’s all about safety and stability on the move. (He goes on to explain the steadiness of AWD on the move versus FWD and RWD.)
PM: How secure is the Audi business, in general, and with SA’s economic turmoil in mind?
TH: The brand is doing very well. Strategically, the brand is being moved towards being the SUV specialist in the greater VW group, but what was and still is important for us, more so here in SA, is the dealer body to remain cost-effective in light of the downturn. Although it’s still challenging, they are doing fine. We’ve been in this market for 45-odd years and we are firmly committed to SA.
Thankfully we’d long realised the economic trend was getting tougher and about two years ago we put in some measures to ensure that we were right-sized for this economic reality, and for the dealers and the business to work.
PM: How have you cut the cloth?
TH: Cost-cutting, in a nutshell, and revenue generation, will make you survive. In fact, we are thriving in this depressed economy. These are the result of a reduction in the product range. It was previously large and complex. If anything, be it a car, engine, gearbox or an optional item, was less than 5% of our sales, we then took it out. We focused on cars and configurations that are doing well.
PM: Is this why the latest models of A3, A7 and A8 have been delayed? Are they part of this lean diet?
TH: It’s a combination of many things. Sometimes it’s a supply delay from the manufacturing end. Sometimes it’s a decision we’ve made as a region. The D-segment where the A8 competes has been in decline for years. There is one dominant player in there and thus we have to think really hard about committing to that niche.
But I’ll say this: we will bring in the A8 once we have the right mix. We’ll bring in S8, of which we have many clients who are eagerly anticipating its arrival. Perhaps the 3.0l rather than the 4.0l engine would be great for SA, and I also think a 3.0l TDI long-wheel base would do well here.
The delay for our new A1 was due to supply challenges, but the car will be here within the next two months. We will also bring in the new A7 before the year ends.
PM: Did cost-cutting extend to closing any existing dealers and not rolling out new ones?
TH: Yes. We probably won’t expand the dealer network right now, unless there is an opening in nodes of new activity that grows, and which we must consider despite economic challenges. Take the new Waterfall area as a prime example. Five years ago it wasn’t on our radar but now we find ourselves in discussions if we want to do something there. It’s an ongoing process of feasibility studies, cost management and how the country is developing differently.
There is also a Wonderboom international airport project on the cards.
PM: Anything else new outside of Audi’s fresh new face?
TH: It’s quite gorgeous isn’t it? We have a new designer and he is currently imprinting his signature on the cars. And we are moving away from these massive and expensive dealerships. We are building small showrooms with fewer cars and have integrated augmented reality (AR) technology. We now have what we call Customer Private Lounges (CPL); essentially these are virtual showrooms that can showcase our entire range in a small space.
Customers wear these 3D goggles and configure a car down to even the colour of seat piping and stitching. Once done, they can use their arms, Tony Stark style, and superimpose the result on a wall. Or they can take a virtual test drive and get a feel for the ambiance in their specification. It’s quite brilliant. Our first CPL is based in our Centurion showroom.
Listen to the latest episode of Cargumentative
MOTORING PODCAST | Cargumentative - Wheels Club Wonderland