The battle of Bavaria

Audi is taking aim at its bigger rival BMW in the race to become the top German luxury brand

The battle of Bavaria


As corporate brand battles go, Coke vs. Pepsi and Nike vs. Adidas are fine for the masses, but among the amply-lucred, nothing beats the raucous showdown between Audi and BMW for the hearts, minds—and wallets—of luxury car buyers. In the past few years, the two German automakers have stepped up their ad campaigns, calling each other out in TV spots and on billboards. But after months of red-hot sales, Audi clearly has the momentum.

In almost every month this year, the company has broken its previous worldwide sales records. In Canada, Audi is leading almost every other brand so far this year in growing its sales, up 33.3 per cent to roughly 12,700 vehicles, compared to the first 10 months of last year. And thanks to the fat margins on every new A4 sedan, Q5 crossover and spaceship-like R8 sports car, Audi fuelled half of parent company Volkswagen’s profits last quarter.

“They’ve done a great job of attracting younger buyers who can afford luxury cars,” says Michelle Krebs, an analyst at The fact Audi has done so amid a recession is doubly impressive. As one B.C. car dealer says admiringly of the way Audi has positioned itself: “Drive a BMW and you’re basically saying, ‘I’m a rich guy who sold your grandma mortgage-backed securities,’ while an Audi says, ‘I’m rich but I use recycled grocery bags and dropped my subscription to Cigar Aficionado.’ ”

While all three German luxury brands, Audi, BMW and Mercedes-Benz, have roared back from the recession at an astonishing pace, earlier this year CEO Rupert Stadler vowed nothing less than to make Audi the world’s top-selling premium car company by 2015. The company is already neck and neck with Mercedes for second place after BMW, thanks in no small part to its dominance in China.

Yet all luxury brands are pushing hard to unseat Audi in China. Meanwhile, Audi must boost its presence in the rebounding U.S. market—with a market share there of just 0.9 per cent, it trails its German compatriots by half. But as the recovery takes hold, this is one brand battle to watch—if you have the bucks.

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