DETROIT -- Audi will boost its U.S. marketing budget 15 to 20 percent this year in a bid to swipe market share from rivals as they cut back.
We strongly believe that our competition will hit the brakes quite hard when it comes to marketing activities, and we took the decision to do exactly the opposite, Peter Schwarzenbauer, Audi AG board member for marketing and sales, said in an interview here today.
Schwarzenbauer said the economic crisis could be a huge help for Audi as it seeks to build brand awareness and prestige in the United States. In 2008, Audi sold 87,760 vehicles in the United States -- well short of its stated goal of 100,000 for the year and down 6.1 percent from 2007. Still, that performance was better than the industrywide decline of 18.0 percent.
Audi executives are undaunted.
Audi was one of the few brands that gained market share in a tough U.S. sales environment last year, rising incrementally to 0.7 percent of the total market from 0.6 percent in 2007.
1 million in sales
The goal is 2 percent by 2015. Meanwhile, Audi global sales topped the 1 million mark for the first time.
Lets face it. If you look at awareness, prestige and image levels and compare us to BMW and Mercedes, it probably would have taken us five to eight years to catch up. In a crisis environment, this could help us get there much faster, Schwarzenbauer said.
Audi also is sticking by its plans to boost its worldwide product portfolio to 40 models from 26 by 2015 at a cost of about $2.73 billion a year at todays exchange rates. This year in the United States, Audi will launch a clean-diesel version of its Q7 crossover and a compact crossover, the Q5.
We are going to continue with our product portfolio. We are going to continue investing more money in the brand than ever before, and we are on a very good way to working with our dealers to get them also up to speed in order to really handle all of this, Schwarzenbauer said.
Audi does not disclose its marketing budget, but Schwarzenbauer said the automaker will spend more in 2009 in the United States than ever before. The money will be spent in three areas: TV commercials, including high-profile spots during the Super Bowl and Oscars; online; and with dealer advertising groups.
Last year, Audi had 24 dealer advertising groups. This year, that number will more than double to 52, said Chief Marketing Officer Scott Keogh.
One area the money wont go toward is incentives, said Audi of America Inc. President Johan de Nysschen.
We could have sold 100,000 cars last year. We absolutely could have, but for the sake of an extra 10,000 cars to destroy the value of a million cars that are out there just doesnt make sense, de Nysschen said.
Not only do incentives destroy value, de Nysschen said, but they arent needed. Audi now has 78 to 80 days worth of inventory on U.S. dealership lots. Thats more than the 60 days it prefers. Counting vehicles in transit from the factory and those being held in port, de Nysschen said the figure is closer to 100 days..