Audi to Challenge BMW Under Volkswagen Brand Reorganisation

17 May 2002

Volkswagen has announced it will reposition its Audi marque as a competitor to Bayerische Motoren Worke under the sweeping brand reorganisation it unveiled last year [WAMN: 26-Nov-01].

Audi heads VW’s new sports segment, which also includes Lamborghini and Seat. As such, its designs will be given a sportier feel in a bid to rid the brand of what executives feel is a conservative image.

The marque is set for the most radical transformation of any VW brand under the scheme. “We want Audi to become the most exclusive premium brand in Europe,” declared Volkswagen chairman Bernd Pischetsrieder. “It's the most important part of our new brand strategy.”

The move is designed to better differentiate Audi from other VW lines, reducing internal competition and boosting sales and profits. It is already among the German car giant’s most profitable marques, raising earnings 34% last year to €1.32 billion ($1.2bn; £0.82bn), while sales volumes in the first quarter of 2002 rose 7.8%.

As a result of the brand reorganisation, Seat will fill the bottom end of the sporty segment, leaving Audi to target the top end. Its most basic car will be the compact A3 model.

The brand’s bid to move upmarket reflects internal VW studies that show drivers of the group’s mid-market lines who wish to upgrade often leave the VW family in favour of BMW. In addition, BMW has proved relatively immune to recent weakness in the auto sector.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff