Residuals not an issue, says Audi

AUDI Australia managing director Joerg Hofmann has hit out at perceptions that the prestige German brand is a rung below BMW and Mercedes-Benz.

Citing resale values as a prime example, Mr Hofmann said media reports tended to show Audi vehicles in a favourable light but often reached what he claimed was an incorrect conclusion that its residual values were worse than its main German competitors.

"In most of them you come to the conclusion that our car is on the same level, or most of the time, superior to our competitors," he said.

"(But) sometimes in the same article you see the very last sentence saying, ‘Unfortunately, well, the Audi would be my choice but consider when you sell the car you lose ... whatever $3000 or $5000 ... compared to your competitor.’"He claims such statements were incorrect, arguing that poor residuals may have been weakness of Audis of the past "but not today".

"You will see me repeating the message over the next months and years – the Audi of the past is not the Audi product of today," he said.

Independent fleet executive from Sureplan Australia Tony Robinson supported Mr Hofmann’s views. He told GoAuto that BMW and Mercedes-Benz have trouble with poor residuals for their upper-end models – just as Audi does.

"They are definitely not alone there," he said. "You only have to look at residuals for a 7 Series. It comes down to a case of who manages it better."Mr Robinson said in the past few years Audi had done a lot of work on improving its line-up and equipment levels, particularly in the area of residuals on its A4 range.

"Audi has one of the best fleet programs and servicing deals compared to its key rivals," he said.

Mr Hofmann (pictured at left) conceded that the A6 and A8 models needed more work on residuals to lift perceptions. Quoting Glass’s Guide residuals for a 2004-2005 A3 versus a BMW 120i and Mercedes-Benz A190, Mr Hofmann said an A3 showed a better residual after three years ownership and 60,000km – 68.37 per cent compared with the 67.83 per cent for both the BMW and Benz.

"This is really a success story for us," Mr Hofmann said.

In the B-segment, the A4 2.0 performed strongly against the BMW 320i, Mercedes-Benz C180K and Lexus IS200. The A4 residual was 64.46 per cent, ahead of the Lexus IS200 (the previous model) on 62.03 per cent and BMW 320i on 64.20 per cent.

The Mercedes-Benz C180K proved strongest with a 67.39 per cent residual.

"We don’t have to hide ourselves here," Mr Hofmann said. "We are right on track in this competitive environment."However, he conceded that while A4 residuals were strong, work still needed to be done on the A6 and A8. In the C-segment, the A6 was ahead of the Lexus ES300 but trailed the 5 Series BMW and E-class Mercedes by a significant margin.

The A6 2.4 V6 manages 63 per cent, behind the 525i and E240 at 68 per cent and 69.08 per cent respectively, with the Lexus ES300 on 62.63 per cent.

"We have to work on the A6 to get closer to the other two German brands," he said.

Mr Hofmann said Audi was "definitely in a competitive circle" with BMW and Mercedes, and was ahead of Lexus models on residuals. "We are definitely not lost or far away from our competitors in the C-segment," he said.

In the D segment Audi was again headed by BMW and Mercedes-Benz but better than Lexus. "Maybe the area we have to do the biggest homework is the D-segment," he said.

The A8 has a residual of 58.49 per cent against the BMW 745i on 63.53 per cent, S430 on 61.16 per cent and Lexus LS430 on 55.77 per cent.

Audi believes its "approved plus" program launched this year will assist in improving residuals. The program offers a two-year factory warranty on Audis less than six years old and having been driven less than 120,000km, including 24-hour roadside assist.

The company’s guaranteed future value program, which is currently available on A4 models only, will also be expanded next year to include the A6 and A8.

"In three years we hope our residuals will be much higher," Mr Hofmann said. "We want to be ahead with our residual values in every segment."