Audi pledges people over profits

SATISFYING people, not just profit and volume, is the new mantra at Audi Australia, as managing director Uwe Hagen strives to sustain the spectacular sales growth the company has experienced since 2004.

Under a new plan called Strategy 20/20, the aim is to exceed buyers’ expectations while nurturing staff committed to the growth and prosperity of Audi in Australia at both a wholesale (head office) and retail (dealership) level.

The strategy is the only way forward if Audi is to continue to make sales headway against arch rivals Mercedes-Benz and BMW, according to Mr Hagen, who only nine months ago replaced boss Joerg Hofmann when he returned to Germany to head up Audi AG’s retail network.

“Achieve these four pillars – volume, profit, customer satisfaction and staff satisfaction – and the rest will fall into place,” Mr Hagen told GoAuto at the launch of the vital new A1 hatch in Melbourne last week.

From top: Audi Australia managing director Uwe Hagen, Audi A1, Audi dealership.Mr Hagen, who shaped his career at BMW in Germany as a dealer principal rescuing unprofitable outlets in cities like Hamburg before joining Audi six years ago, suggested that the unrelenting sales volume drive of his predecessor – while great for the once-languishing brand in Australia – can now only be sustained through the proper management of people.

“Of course you need volume because it is an essential part of this business,” he said, “but volume has to have a natural demand from the market.

“If you create this demand, it means you are disturbing your ideas of residuals and you are disturbing your retail sense.

“So acceptable volume and profitability on the retail side is what we are looking for, and to achieve this it is very necessary to work together with the rest of your organisation and the sales team that are looking for this volume, because there is a difference.

“You can wait for volume or you can look for volume. It means that you have to know your market, you have to know your customers, and you have (to concentrate on) customer satisfaction and staff satisfaction.

“You need to have an educated team that will stay with the brand, so the education will stay in the brand. Also, the customer will then have a connection with the people he or she deals with… in the sales and aftersales side.

“If we achieve this recipe, then the whole menu will be really tasty. This is quite an important analogy because, even if you use the best meat, you can ruin the taste by putting too much salt on.

“Therefore we need a strong management team who have an idea on how to react to different market conditions, and that’s why we have a huge focus on both selecting the right people and then training the right people permanently. And this helps very much.”

Mr Hagen believes that investing in people and facilities sends out the right message to investors as well as consumers.

“It’s also a form of responsibility we have already mentioned that our retail organisation has invested a small fortune (improving dealerships) and, as the period of the return on investment is at least ten years, it is important to have a strategy that creates confidence in the strategy, as well as the different decisions that are made.

“It is a form of confirmation for our investors that they believe in what we say… it is like playing in a team – relying on each other to score a goal – and that is exactly what we are doing at Audi Australia. As there are differences in how the wholesale and retail areas work, both sides have to trust each other that they are doing the right thing.”

Double-digit growth has been the norm for Audi since Mr Hofmann took control in early 2005.

This year, sales to the end of November are up by 16.9 per cent against the same period in 2009 to 12,471 units – slightly better than Mercedes-Benz (up 16.4 per cent to 19,852), while BMW volume has only edged up by 4.6 per cent to 16,384.