Audi’s on a roll, seeing larger gains than BMW or Mercedes-Benz in Canada

The Germans have a saying – sehr geil – loosely translating to trendy, cool, sexy.

That's Audi right now.

Audi established a sales-volume record last year and carried momentum into the first quarter of 2016, especially outside of its home base, Europe. Of the more-than-record 450,000 vehicles sold globally in the first three months, nearly one-third were bought in China. In Canada, first-quarter sales jumped 25 per cent year over year, better than any premium auto maker with equal or better volume.

"Model-wise, there are two reasons for this international success story," company chairman Rupert Stadler told a throng of media and VIPs at the recently wrapped Beijing International Automobile Exhibition. "It is the enormous response to our SUVs, and our best seller, the Audi A4 sedan."

In North America especially, even as parent company Volkswagen was slow to see demand, Audi sensed the market's oncoming lust for premium SUVs a decade ago, launching the Q7. Today, while Audi's sporty image is represented by its TT and R8 sports cars, SUVs make up nearly 50 per cent of the auto maker's sales on this continent.

"Any brand that adopted SUVs earlier is in a better position today because of the continued growth of light trucks versus passenger cars," says Robert Karwel, senior manager, Power Information Network, J.D. Power Canada. "This strategy is significant in that it brings with it not only body styles that are popular, but vehicles that consumers are willing to pay a high price for, which then results in higher profits for the manufacturer. Observe how SUVs have proliferated Audi's lineup."

Dogged a decade ago by a reputation for dubious reliability and service – described by Forbes Magazine recently as "one of the most finicky and service-heavy luxury cars you could buy" – Audi today is rated tops among premium brands in the annual J.D. Power customer service survey. The mid-size Q7 is Consumers Reports' top-rated SUV. The Q5 and compact Q3 also score highly, as does the stable of sedans ranging from the A3 to A8.

As with German rivals Mercedes-Benz and BMW, Audi is reaching into all segments, pickup trucks excluded. Twenty new or refreshed models are being brought to market globally this year, including the A4 Allroad station wagon displayed recently at the Vancouver auto show.

The momentum is with SUVs, though. The new Q2, a subcompact SUV targeted to urbanite millennials and Gen-Y. Another is the powerful SQ7. On Thursday, Audi said the Q2 will be equipped with its own SIM card with an unlimited data plan -- that is, an Internet connection as standard equipment. The company is also planning Q4, Q6 and Q8 models, and it announced a Q7 e-tron, capable of up to 56 km in purely electric mode.

BMW and Mercedes-Benz are like the two thoroughbreds engaging along the rail, toward the wire, battling to be the world's No. 1 maker of premium vehicles. Meantime, here comes Audi on the outside, tactically, confidently.

Audi cradles that image, casting itself with fun, irreverent advertising as both powerful and smart. In 2008, an infamous Super Bowl TV commercial showed an old man in a stately mansion, waking in bed with oil on his hands and car parts under the covers – evoking the horse-head scene from The Godfather. Cut to the driveway, where an Audi R8 roars to life, followed by the printed message: "Old luxury just got put on notice."

That halo car "started a revolution," Audi of America president Scott Keough said at the New York auto show this March, when introducing the R8 Spyder convertible. "It declared our intent, and it accelerated everything." U.S. sales of the full line jumped from 80,000 back then to better than 200,000 in 2015.

The TT, RS7 Sportback Performance and the R8 sports cars rev up the consumer's imagination. In terms of sales though, the bedrock vehicles are the A4 four-door sedan and Q5 SUV.

The A4, redesigned for 2017, is being advertised with a video collage of quick cuts – a band playing, a debate team returning home, a Wired magazine cover, a Mars probe landing, a crushing tackle in a high school football game – all scored by Iggy Pop's 1973 head-banger, Search and Destroy. The tagline: Intelligence is the new rock 'n' roll.

Improved power, efficiency and safety technology are complemented by a virtual cockpit, enabling the driver to switch between classic and infotainment modes. In infotainment, the traditional speedometer/tachometer is obscured and replaced by a colourful display. The system, powered by a fast Nvidia processor, can be controlled from the steering wheel.

"The idea of equating rock 'n' roll with the new world of technology felt very fresh to us," Loren Angelo, director of marketing at Audi of America, told AdFreak. "These inventors and thinkers are the new disruptors. They are the people we all want to be. What's more rock 'n' roll than that?"

The Q5, remodelled for the first time since introduced in 2009 and being built in Mexico, shows Q7 design influences in the spy photos. It is reportedly based on the A4's platform which sheds significant weight. An anticipated 2.0-litre, four-cylinder engine would bring 252 horsepower. How to advertise this one? A Sex Pistols soundtrack, perhaps?

Technological development is core to Audi strategy. At the annual meeting this spring, Stadler announced that Audi will hire 1,200 people this year and spend €300-million ($440-million) toward "the mobility of tomorrow."

"Our model and technology initiative will ensure our growth of tomorrow," Stadler said, on Thursday, "Electrification and digitization represent an historic shift."

In China, he reaffirmed a pledge to manufacture an all-electric SUV by 2018, with single-charge range of an estimated 500 kilometres, almost enough for the Montreal-to-Toronto drive. Meantime, the A3 Sportback e-tron, a new hybrid hatch, allows 26 kilometres of battery driving and combines with a 1.4-litre, 150-horsepower gas engine; it starts at $39,200. Said Stadler, on Thursday at the annual meeting: "Starting in 2018, we will launch another electrified car each year," announced Stadler.

There are one billion cars on roads today – a number, Stadler says, that pronounces the vehicle as the ultimate form of individual mobility, while simultaneously screaming a "need for urgent solutions for the cities of tomorrow." At the Los Angeles auto show in the fall, the company announced that 25 per cent of its fleet will be hybrid, electric, or hydrogen fuel-cell by 2025. The investment into zero-emission vehicles will help Audi balance governmental mandates for overall fuel-efficiency, as its SUVs surge in popularity.

"It is best to have both worlds together, offering SUVs at the same time as high fuel-efficient engines," Daniel Weissland, president of Audi Canada, said at The Globe's auto summit earlier this year. "In the bigger SUVs we are starting to put smaller engines with high fuel efficiency, and on the other side we have new technologies like Audi h-tron [fuel cell] Quattro, and e-tron electromobility. We believe the future is going to see more of those cars."

Audi's been barely dinged by diesel-scandal fallout, even as VW sales slumped. Karwel says VW customers are largely looking for the money-saving efficiency offered by diesel engines in lower-priced vehicles, while Audi's diesel powertrains attract discerning drivers due to best-of technology, torque and efficiency. Drivers are keenly aware of Audi's technological advancement over the past decade, thus "its gasoline engines are also being seen as perfectly suitable for the buyer to get the most from their ownership experience."

In Beijing, Stadler addressed the diesel controversy as a short-term hurdle. "In the long run, I don't think so, because the industry is employing a lot of people. Our industry is highly innovative and investing heavily into new technologies like digitization, like electrification, and I think we will ultimately give something very good back to society."

Audi also presses ahead with autonomous vehicles. Prior to the 2015 CES, AVs ferried journalists from Palo Alto, Calif., to Las Vegas, and at the recent Berlin film festival, a driverless A8 shuttled actors to the red carpet. In 2017, the new A8 is scheduled to become the Audi's first series‑produced car with piloted driving, capable of speeds up to 60 km/h on the autobahn. "By 2025, we will see fully automated driving," Stadler said Thursday.

Consider the future: You, an Audi R8 V-10 plus Coupe, the autobahn, hands off the wheel.

2015 Audi sales

Audi sales in Canada jumped 9.1 per cent over 2014 to a total of 24,514, representing 1.4 per cent of the total market. By model:

2016 Premium Brand Sales

First quarter sales, with percentage difference from Q1 2015

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