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Automotive News - pg 8 - November 18, 1996
Audi offers cash for single points - Kathy Jackson Staff Reporter
Audi of America wants most of its dealers to be operating single points
over the next two years, and is offering cash incentives to get them
moving in that direction. Only four percent - about 10 of Audis 260 U.S.
dealers - have exclusive Audi stores. Vice President Gerd Klauss said
that number must increase if the company is to meet its sales goals of 20
percent growth annually in this country. "Dealers have to step up today,"
Klauss said. "They must be into more brand separation; were putting money
behind it." Audi is giving dealers the money they may need to convert
their stores to single points. Single-point dealers also are eligible for
extra incentives for reaching sales and customer satisfaction goals. That
could average as high as $400 for each car sold. "The name of the game is
owner loyalty and higher sales," said Ken Moriarty, Audi marketing
director. "What is important is that (the customers) enter an Audi
In addition to the dealer programs, Audi will;
Introduce an A4 station wagon called the Avant in the United States next
fall, and add a new A6 Avant wagon in 1998.
Produce more all-aluminum models which will be available in the United
States on some of its second-generation cars. Currently the A8 is Audis
only all-aluminum vehicle.
Double its ad budget for 1997 to an estimated $80 million, its largest
budget ever in the United States.
"Audi is one of the hottest franchises in this market," Klauss said.
"This is not a boast; its a fact." Audi is on track to sell 25,000 cars
this year, the most since 1987. The company would like to top 30,000
sales next year. The record sales year for Audi was 1985 when the company
sold 74,061 cars here. In order to facilitate planning and sales
projections, the company began entering into individual contracts with its
dealers for the 1997 model year. Dealers tell the company how many cars
they think they can sell, and the company promises to deliver that number.
Audi expects to sell from 27,000 to 30,000 units next year. Dealers must
contract for whatever percentage of the national total they sold for the
1996 model year, based on the companys estimated 27,000 unit minimum to
the 30,000 maximum. "Getting product is our biggest challenge right now,"
said Malcolm Pray, owner of Pray Audi Corp. in Greenwich, Conn. "This
will help dealers get cars who have done a good job in the past." Pray,
Audis largest dealer, spent $300,000 of his own money two years ago to
construct a single point. He hopes to sell 1,000 units this year, and is
asking for 1,200 cars as part of his 1997 contract.
Audi classifies its dealers as "A" "B" of "C" dealers. "A" dealers
operate single points; "B" dealers have a stand-alone showroom but share
service with other brands; "C" dealers have different products under one
rood, but have a wall between the products. Klauss said about half of its
dealers are A,B, or C; the rest sell various products in one showroom.
Although Klauss would like all of the dealers in one of those - categories
mainly the "A" category - that is not likely to happen. So the game plan
is to get as high a percentage as possible within two years. "They know
some people wont build single points because Audi is not their main
franchise," said Terry Trickett, chairman of the Audi Dealer Council in
Minneapolis. Trickett said Audi, like most manufacturers, would like
single point dealers, but he said the company and council have agreed not
to force the concept on dealers. Instead, the company will try to lure
them in with cash incentives. "What they really want is 260 dealers who
are paying attention," Trickett said. "Theyve established standards to
reward those dealers who are single line, and I think its pretty
rational." But not all dealers are solidly behind Audis plan. Tom
Harper, owner of Harper Audi (Audi-Porsche-Volkswagen-Jaguar) in
Knoxville, Tenn., put it this way; "There wont be walls in my showroom."
Harper averages six to eight Audi sales a month, and plans to contract for
10 to 12 Audis per month for the 1997 model year. He will continue to
sell other makes in the same showroom with Audi. "Over the years, every
manufacturer has tried this single point concept," Harper said. "But for
the dealer to be successful, they must be customer specialists. Thats
what manufacturers dont understand. We take care of the customers
interests, not Audis"
Thomas A. Robbs firstname.lastname@example.org
1988 90Q Milwaukee, WI - USA