Audi risks fading as market picks up

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IOL mot pic mar3 Audi TT Teaser 1 . A teaser image of the 2015 TT, the only new model expected on the Audi stand at the 2014 Geneva motor show.

Berlin, Germany - Just as Europe's car market recovery shifts up a gear, Audi will have little new to display at this month's Geneva motor show, other than a niche sports car.

Audi, which accounts for almost half of its parent group Volkswagen’s operating profit, will unveil a new version of the TT sports car, a model that accounted for less than two percent of the brand's 1.58 million sales in 2013.

In contrast, BMW will showcase the latest model from its cutting-edge “i” series of electric cars, while Mercedes-Benz will present a new version of its C-Class, adding to a string of recent launches.

Having doubled its model lines and deliveries over the past decade to narrow the sales gap on luxury car market leader BMW, Audi has not had much new on its stands at several recent motor shows compared to its rivals.

“The current order is anything but set in stone.”

What's more, VW insiders are saying overhauls to Audi's top-selling A4 sedan and Q7 SUV, slated for 2014, will be pushed back into next year as the cars need to be reworked.

That’s making some analysts question whether Audi can maintain its sales growth of recent years and meet its goal of overtaking BMW by 2020 - which in turn could torpedo Volkswagen’s drive to become the world's biggest carmaker.

Stefan Bratzel, head of the Centre of Automotive Management think-tank near Cologne, said: “Audi is facing a barren spell just when Mercedes looks to take the fight back to the luxury car industry rankings.”

KEY BATTLEGROUND

After a six-year slump, Europe's car market is back in growth as the region's long-suffering economy recovers from a debt crisis, with sales in the European Union rising for a fifth consecutive month in January.

The luxury car industry avoided the worst of the downturn, thanks in part to strong demand from developing countries, and will be a key battleground as the European market recovers.

Research firm IHS Automotive forecasts Audi will briefly snatch the luxury sales crown in 2017/18, as it aims to double its line-up of popular premium crossovers that includes the Q5 compact SUV.

NEW MODELS

But it expects both Audi and Mercedes to miss their goal of overtaking BMW by 2020, with Mercedes staying in third place throughout the period.

However, Jonathon Poskitt, head of European forecasting for LMC Automotive, said the significance of the latest version of the TT sports car should not be underestimated.

Developed in the mid-1990s after Audi's ascension to the premium market, the original 1998 model won rave reviews for its curvy styling, inspired by the so-called Bauhaus design school that features simplistic, clean industrial looks.

Poskitt said: “The TT projects a very positive image for the overall brand that's still highly important for Audi.

“It helps cement the cutting-edge appeal Audi is after.”

Volkswagen insiders are saying the new TT - based on VW's latest modular platform designed to underpin as many as four million small and midsized vehicles - will feature sleek styling, lower weight and a top speed of 250km/h.

While it will only ever be a niche car in terms of sales, such vehicles can be essential to building a loyal fan base.

UK-based travel consultant Andrew Abrahams, said he was going to buy an Audi A3 hatch about a decade ago but fell for a TT - which wasn't much more expensive than a revved-up A3.

Abrahams, a member of the Audi TT Owners Club, said: “I wanted a TT from the moment I first saw one. The shape and the interior were just so different but I didn't think I'd ever be able to afford one.”

Reuters



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