Audi chairman Rupert Stadler rarely gives interviews to UK journalists, so CAR was chuffed to score half an hour one-to-one with the Audi boss at the recent Detroit auto show 2009. Stadler gave us the lowdown on Audi’s future strategy, new-model plans and how Ingolstadt was coping in the face of a global recession. An abridged interview appears in the new March 2009 issue of CAR Magazine; over the next five pages, read the full transcript of CAR’s interview with Rupert Stadler.
CAR: A lot of Audi’s growth has been delivered by new models in the past 10 years. You’ve grown from being a small brand with four or five models a decade ago, now you have 26 models in total. How much bigger can Audi go?
Rupert Stadler: I would say up to 40 models.
That’s a pretty precise answer!
This is part of our strategic planning. [Cue heavy laughing. Stadler is prone to bouts of laughter, especially when talking about secret new product plans. It’s a refreshingly light touch for a boss in the auto industry]
You don’t expand like that overnight. How long before Audi has 40 models in its line-up?
By 2013 the majority of the model range will be prepared. But Audi will never stop having ideas. If an idea is a good one, we will try and launch it.
Is it important for a brand like Audi to recalibrate what it stands for? A brand that stands still will go backwards, unless it’s innovating, won’t it?
That is true. You can never stop or be satisfied as an entrepreneur unless you innovate. We have given ourselves really ambitious targets for our 2015 strategy – but that’s good. You have to set yourself ambitious targets for your future – because then you really push your organisation. Look at what we’ve done in past few years: Audi has really done a great job in improving its image, increasing its prestige and growing the product portfolio. And this was a big stimulation for our dealer body, because we invested in new products and they saw them before the public did. Dealers said to me: ‘If this is true, then I will invest in this brand.’
Audi has broken through a million sales last year for the first time. Where do you see Audi’s volumes in the next five years?
We all know future sales depend on the market’s developments, but in general we plan to grow to 1.5 million units annually with our new, bigger product portfolio. This should be, could be, by 2015 – this is the cornerstone of our strategy. But of course we have to reflect the current financial situation…
CAR: A few years ago, Audi stated an ambition to become the biggest premium maker in outright volume – but you no longer say this. Have you got cold feet?
Rupert Stadler: We no longer want to be the biggest. We want to be the most attractive and most successful. Being biggest is too focussed on numbers and sales volumes – it’s just one target within a set of targets. What we aim for is qualitive continuous growth.
Last year was a sales record for Audi. But did you suffer a slow down at the end of the year like everyone else?
No. We had big growth in the second half of 2008. We had new product: the A4 limousine and Avant, the renewed A3 family and A6 family and the new Q5. We had a big order bank and this was part of our success. But it’s true to say that order bank was created in the first half of 2008…
New cars like the Q5 you mention are mostly incremental models. With a further 14 new model to come, that must be how you intend to reach 1.5 million sales a year?
Indeed.
Tell me about the timecycle Audi works to. Do modern manufacturing processes and model lifecycles need to change? I’m thinking of facelifts like the A3 refresh. Don’t you need to change how you build cars, now that the public always demand the latest thing? Won’t your cars need to be refreshed more often?
That’s a difficult question. Each product change within a lifecycle involves a big investment from us. We need a return on investment and the lifecycle of our products – which is, say, between six and eight years – will remain. We will continue to have refurbishments or improvements within a lifecylce of a car, but not a big change in shapes. This will not be possible.
Okay, so Audi’s already grown a huge amount – but don’t you risk reaching a point at which there are too many Audis on the road? When premium becomes mainstream, doesn’t that damage the brand? We’ve asked the same question of your rivals. You could end up with too many Audis out there – does this worry you?
No. I would be happy to see many more Audis on the street! If you look at a market like the US, we sold close to 90,000 units last year. Our key competitors are selling 200,000 to 300,000 units here. It’s a really big market. Even if you put 100,000 cars more a year into a market like America, it would take time to see them everywhere. Our target is to work intensively in all international markets including Asia, Middle East, the US, Australia – there is big potential for us in these territories.
Which territories are you most focused on then?
The US, China – these are our main markets for growth. But we should never forget that there are plenty of small markets where we must also do a good job. We sell 100,000 Audis in the UK, for instance.
CAR: It’s fascincating to see how the Audi brand has been stretched and evolved. Ten years ago, if you proposed an R8 we would be laughing you out of town. But you’ve hit the bullseye first time. Respect is due. But how will you repeat this success at the other end of the market? Doesn’t launching the A1 worry you? Couldn’t it devalue the brand?
Rupert Stadler: First of all, we are very proud about the A1. If we weren’t convinced, we wouldn’t be launching it. We are deeply convinced the A1 will fit the Audi brand, it will perfectly fit to the market requirements. What we see now is that a lot of urban cities need mobility. The young generation need a different type of moblity – they want something much more emotional, more fancy, more premium. If you go to Shanghai or Peking or LA, this could be a gorgeous car for those markets. We are convinced that premium cars in this segment will be successful. People nowadays like to have quality things, they want to touch fine leather, they want to hear good music in their car. Even if it’s a small car…
It’s a car that’s in tune for the times, but I guess you’re late to the party after BMW’s Mini. Of course here in Detroit, you are now launching the V10-powered R8. What about the diesel R8? It’s technically possible, is that the next addition to the R8 range?
Time will tell! [Laughs]. You can’t do everything at once. We have a lot of work to do for the next few years. You have seen the concept R8 TDI one year ago in Detroit – we are convinced that a diesel will work in that car. Audi is a diesel pioneer, but we’re doing this step by step.
Launching a diesel supercar would be a strong message, though, wouldn’t it? In your presentation earlier today, the message was all about diesel perception. Where does that leave your hybrid strategy? What are your latest plans?
For the future, hybrids will be an intermediate step towards the electrification of cars. But my personal view is that if you go through the stands here at the NAIAS, especially the American brands, they are raising expectations very high – and they have a lot to prove. With Audi, when we make a promise, we fulfill it. We have said very clearly, our preferred solution today is TDI technology. It’s available now and if a customer is really interested in fuel consumption there is no better solution on sale today. The others are talking about dreams…
I share your scepticism. Just compare an aluminium Audi A8 with the Lexus LS600h…
Indeed. Journalists in the UK compared the A8 against the Lexus LS600h and the Audi was 30% more fuel efficient than the hybrid. Why the hell should we invest today in this hybrid technology? But there will be a next-generation system and Audi is working on that with much better battery performance, and superior energy performance.
Really? What timeframe are we looking at to see Audi hybrids in showrooms?
If we’re talking about real serious production hybrids, I’d say 2014 or 2015 in our industry. The rest will be limited editions and show cars and PR-style marketing campaigns.
The domestic US manufacturers have been talking up electric vehicles highly today. Do you think the American market will ever really switch on to diesel as an alternative? Especially when diesel costs more than gas?
The question is, is the American customer really interested in fuel consumption and in a viable planet? I’m watching the reaction to Obama and still believe if you really compare the technology, the answer is very clear. We are convinced and we try to convince our customers. There is an old diesel image here in America that it’s loud , smelly and dirty – but this is not true. We have positioned our diesels as the cleanest ones and our TDI cars have the torque that Americans love. It’s the perfect fit here. If we let our dealers test the diesel, they go ‘wow, what sort of engine is that?’ It’s about letting people experience modern diesels.
But you’re still working with Porsche on a Q7 hybrid, is that right? Is that still up and running?
No, we decided to go with the Q5 hybrid solution.
Really? Speaking of Porsche, what do the industrial changes underway at the Volkswagen group mean for Audi? You’ve collaborated in the past with cars like the RS2… can we expect further co-developments?
You need to ask Porsche and the Volkswagen group about that!
But from your point of view, would you like Audi to work more closely with Porsche?
If it provides a win-win situation, then yes. Look at our six-cylinder diesel, it will soon be available in the Porsche Cayenne. You see that there already is a collaboration between Audi and Porsche.
You’re at risk of running out of motor shows at which to launch your products. You even show cars at the Worthersee hot hatch festival in Austria. Might you also run out of badges? There are so many As and Qs you can create!
No, don’t worry… we are creative enough. We could expand our model range up to A9 and A10 – there is no limit. [Cue much laughing and the PR intervenes to stress that Stadler is joking]
I share your scepticism. Just compare an aluminium Audi A8 with the Lexus LS600h…
Indeed. Journalists in the UK compared the A8 against the Lexus LS600h and the Audi was 30% more fuel efficient than the hybrid. Why the hell should we invest today in this hybrid technology? But there will be a next-generation system and Audi is working on that with much better battery performance, and superior energy performance.
Really? What timeframe are we looking at to see Audi hybrids in showrooms?
If we’re talking about real serious production hybrids, I’d say 2014 or 2015 in our industry. The rest will be limited editions and show cars and PR-style marketing campaigns.
The domestic US manufacturers have been talking up electric vehicles highly today. Do you think the American market will ever really switch on to diesel as an alternative? Especially when diesel costs more than gas?
The question is, is the American customer really interested in fuel consumption and in a viable planet? I’m watching the reaction to Obama and still believe if you really compare the technology, the answer is very clear. We are convinced and we try to convince our customers. There is an old diesel image here in America that it’s loud , smelly and dirty – but this is not true. We have positioned our diesels as the cleanest ones and our TDI cars have the torque that Americans love. It’s the perfect fit here. If we let our dealers test the diesel, they go ‘wow, what sort of engine is that?’ It’s about letting people experience modern diesels.
But you’re still working with Porsche on a Q7 hybrid, is that right? Is that still up and running?
No, we decided to go with the Q5 hybrid solution.
Really? Speaking of Porsche, what do the industrial changes underway at the Volkswagen group mean for Audi? You’ve collaborated in the past with cars like the RS2… can we expect further co-developments?
You need to ask Porsche and the Volkswagen group about that!
But from your point of view, would you like Audi to work more closely with Porsche?
If it provides a win-win situation, then yes. Look at our six-cylinder diesel, it will soon be available in the Porsche Cayenne. You see that there already is a collaboration between Audi and Porsche.
You’re at risk of running out of motor shows at which to launch your products. You even show cars at the Worthersee hot hatch festival in Austria. Might you also run out of badges? There are so many As and Qs you can create!
No, don’t worry… we are creative enough. We could expand our model range up to A9 and A10 – there is no limit. [Cue much laughing and the PR intervenes to stress that Stadler is joking]