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Audi could cut model variants in Australia

Falling four: Sales of the latest Audi A4 are off the pace this year, dropping by nearly 21 per cent to the end of October.

New Audi Australia boss flags trimmed down variant line-up but model lines to stay

Audi logo7 Aug 2017

By TIM NICHOLSON

AUDI Australia is considering dropping under-performing variants and available options packages as part of a review of its line-up in a bid to reduce complexity and offer better value to its customers.

Speaking at his first media event in Sydney last week since taking the reins in May, Audi Australia managing director Paul Sansom announced that he would take a closer look at the available variants and ensure the best offerings for customers.

“Retail is a complex business and it’s getting more complex,” he said. “And consumer trends are changing rapidly. We need to change fast with it. But to do that we need to reduce the complexity in our current range here in Australia.

“We need to emphasise simple lines with consistent packages that translates into great value for our customers and into our standard customer service levels and providing what our customers want, when they want it and how they want it.”

When asked by GoAuto whether that meant there would be fewer variants in each model line, the former Audi South Africa boss said it ultimately came down to what buyers wanted from the brand.

“Well, we look at it from two ways,” he said. “One, you can look at it just from a very simple way, you just look at the data we’ve got in headquarters, and anything that’s got a mix of one or two per cent, whether it’s an engine variant, transmission variant, a derivative, you might say ‘well, probably no one’s going to miss that.’“So, we'll look at it that way, but first and foremost, we’re talking to our customers, and we’ve set up a number of initiatives to get that consumer insight to say ‘what do you want from the brand?&rsquo.”

Mr Sansom clarified that it was unlikely that the company would discontinue any existing model lines, and would instead focus on cutting down variants, without specifically nominating any lines that are being looked at.

 center imageLeft: Audi Australia managing director Paul Sansom

“One of the things that’s, I think, very obvious at the moment is that when you look into the range – I’m not talking about cutting models, I’m talking about maybe trimming some derivatives and creating some more clear lines – that at the moment I think is very crowded for Audi.” At a glance, Audi’s key models have a similar number of variants to equivalent models from its direct rivals, BMW and Mercedes-Benz.

The Audi A4 is offered in 10 sedan and wagon variations ranging in price from $55,500 plus on-road costs to $102,611, with the performance flagship RS4 still yet to arrive.

BMW sells 11 versions of its 3 Series sedan and wagon, while Mercedes offers 14 variants of its C-Class sedan and wagon range.

Mr Sansom added that the existing options lists and packages were also adding complexity and often confusing some buyers who do not want to be offered too many options.

“There are a lot of different options that a customer can make,” he said. “I don’t think they like that so much.

“The early feedback is ‘don’t give me so much choice, actually. Make that cleaner. We understand your model lines. Let’s understand the derivatives within that and then some clear option packs. So, your technology pack or your comfort back or whatever that might be. Create that for us, and by the way, we want more standard features in the car.’“That’s pretty much what they’re saying. ‘So, we don’t want you to build up a price from an entry level with nothing in it to what I want in it, and then suddenly it’s $5000, $10,000 more.&rsquo.”

Mr Sansom said it would take time for the product strategy to kick in but added that Audi dealers were also keen to see a reduction in complexity of the variants and options.

“So, you’re not going to see any radical changes, because a product strategy is a slow burning string, you only get so many opportunities to change that, but every opportunity we get, we’ll be simplifying our range, and that’s not just from a consumer point of view, our dealers are actually asking us to do that as well, because they’re confused. They can’t consume all of the complexity that we’ve got, and frankly, my own team can’t either. They always struggle to keep up with it.

“It’s the symptom of growth. You’re so busy growing and then there’s demand, and you just keep doing what you’re doing and then when you get a chance like now to have a fresh look at it, you say ‘actually, if we want to grow again, we’ve got to take a fresh look at this product strategy, and it’s got to be clean, it’s got to be simple, it’s got to create more value to attract more people to our brand’, because we’ve attracted a lot, and now we’ve got to attract some more.

“So, if we’re going to grow like we definitely want to grow, then it’s going to be through a clearer product strategy that offers more value, and at the moment, our consumers are a little bit confused, I think, as to what we’re offering and how much value they actually get from it.”

Mr Sansom said Audi Australia was working on the new product strategy now and added that it would reflect whatever is best for the customer.

“So, we just need to streamline a little bit, and we’ve got to look at that from the consumer’s point of view. The consumer’s got to tell us what they want from Audi, how they want to consume. So, there’s a really strong piece of work that we’re a month or so into now that’s going to inform our product strategy.

“So, I’m anxious to get moving, but I’m also cautious to not do the wrong thing. We’ll only do it when we’re ready.”

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