To help achieve its ambitious goal of nearly doubling its sales volume, Audi is restructuring its global dealer network.
Over the next two years, Audi will put more emphasis on its metropolitan brand centers and less on rural dealerships. It will do this so it can handle the model proliferation and volume increases it is planning over the next decade.
The big-city brand centers will serve as sales hubs for rural dealerships.
Ralph Weyler, Audis board member for sales and marketing, said Audi will keep the number of sales points it currently has across Europe, but eventually will reduce its reliance on rural dealers.
We will have fewer entrepreneurs in the future, Weyler said in an interview with Automotive News Europe. But we will not reduce the number of sales points.
Weyler said Audi will rely heavily on its brand centers to act as the central hubs for its dealers in small cities.
The plan will allow a sales point to gain access to every model in the Audi portfolio – including the brands new 100,000 R8 flagship supercar – without having to carry the entire lineup.
The hub will offer things that maybe the satellite dealerships cannot offer, he said. We can have synergies with our locations. If a dealer in a small city wants the R8, then we can switch [the car] to that location.
Audi has said it wants to increase its dealer coverage in large, metropolitan areas. The brand center strategy will help give the brand a flagship presence in major cities without damaging the rest of its dealer network.
In the UK, Audis third-largest global market, the German premium carmaker plans to have four centers that will be dealer hubs. (See story, right)
Audi already has opened brand centers in Berlin, Germany – its largest market – and the US. More US locations and one in China are also planned.
Audi has been slowly narrowing its dealer base for some time. It had 1,884 dealerships in Europe in 2005, down from 2,923 dealers in 2001, the company said.
Philip Wade, managing partner of analysts HWB International in Warwick, England, said Audi is joining a growing trend toward exclusivity in the industry.
One of the reasons that brands want larger centers is because the range and variants of vehicle lineups are becoming more complex, Wade said. There are more niches, and showrooms need to be larger to accommodate all of this product.
Wade also said that by consolidating sales points, a central dealership can have a higher sales volume. In an expensive metropolitan area, volume is essential for dealer profitability.
Weyler said that, typically, the brand centers are funded by dealers, although Audi provides preferable financing rates to most. Dealers that invest in Audis brand palace concept – a dealership design theme which requires high amounts of investment – will serve more rural points as well.
Jens Meiners contributed
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