At the 2013 Washington Auto Show, Audi President Scott Keogh outlined his company’s progress in the US and addressed some of the important goals it has in mind to improve upon its success. Keogh was the keynote speaker for this year’s auto show, presenting his comments before several hundred media, industry and government officials on Jan. 31.
Audi has been selling its cars in the United States for decades, ramping up its presence in 2008 when it established its national headquarters outside of Washington, DC in Chantilly, Virginia. That facility started off with 70 people and is now home to 180 Audi employees, strategically located in the fourth largest luxury car market in the US. Of the decision to locate near DC Keogh noted that it was “the right place at the right time” and that Audi “wanted to be in on the American conversation.” That conversation, apparently, is the policy side of life that Washington is known for.
Keogh outlined Audi’s progress over the past few years as the brand has gone from 35 to 63 model variants and is now the second most cross-shopped brand in America. Cross shopping is when consumers look for a certain car in general, such as luxury models.
The benefit to Audi as it expands its line up is that its average transaction price is by $10,000, with total sales up by 55 percent over the past four years. Its dealers are pouring money into their facilities, investing more than $206 million over the past few years. That has put Audi in a more competitive position against its German arch rivals, BMW and Mercedes-Benz.
Keogh stressed that Audi’s business model is key to the company’s success. The brand has effectively eliminated discounting, planned for growth, built its pricing power and has balanced demand. This winning formula has led to record profits and market share for Audi. Said Keogh, “Consumers get the car they want, dealers move their inventory.”
Audi will continue to invest heavily in new and improved technologies, an area that it has championed for decades. Indeed, in the 1980s its quattro all-wheel-drive system was viewed as an oddity with its competitors saying that it was something for trucks, not cars. These days, luxury makes must offer all-wheel-drive to effectively compete, following Audi’s ground-breaking move.
The company’s aluminum space frame technology is revolutionary, yielding cars that are lighter and stronger — and also more expensive — than steel. Aluminum is more difficult to work with, but Keogh says that it is worth it as its cars are lighter than the competition.
Matrix Beam Lighting
Keogh claimed that, “Audi lights” or its own LED lighting initiative, has spawned the technology across the industry. Its newest quest is to employ “matrix beam lighting” to offer the equivalent of high-beam lighting automatically for improved driver visibility. This technology is ready, but regulatory approval is required before it can be introduced in North America.
Besides lighting, Audi intends to continue investing in clean diesel technology, enabling vehicles to enjoy fuel savings of up to 30 percent as well as more efficient and lower CO2 emissions. Its newest TDI will be rolled out in several models: A8, A7, A6 and Q5. Keogh estimates that since its 2009 introduction, TDI has reduced US fuel consumption by 4.6 million gallons, saved consumers more than $26 million and removed 22,000 tons of CO2 from the environment.
Keogh concluded his remarks by stressing that Audi would like the US to reconsider how it calculates fuel economy as the formula is currently weighted to 55 percent city driving and 45 percent highway driving. In reality most people drive locally, therefore the current standards do not give an accurate picture of fuel consumption. Audi would also like the federal government to close the six cent difference between gasoline and diesel taxes, seeing the higher diesel tax as a possible buyer hindrance.
Audi plans to continue to expand market share and believes that innovation will continue to play a significant part of that. It is also working on “piloted driving,” technology that would enable vehicle owners to let the car park itself with a smart phone app signaling the car to return when the driver is done with her business.
Such innovative work has defined Audi in the past and it looks like under Scott Keogh’s leadership we can expect more of the same. And that will be to the utter delight of many luxury car enthusiasts.