Case Study 2: Audi
‘In 2007, Audi increased its brand value by 17 per cent,’ says Rune Gustafson of Interbrand.
‘In 2007, Audi increased its brand value by 17 per cent,’ says Rune Gustafson of Interbrand. ‘They have been strong on demand creation and brand management, and single-minded about what they stand for.’
There is no doubt that Audi is doing well: pre-tax profits were up almost 50 per cent last year, the best earnings in the company’s history. Steve Fowler, group editor of What Car? magazine, says that Audi’s recent success is the fruit of a two-decade makeover. ‘Twenty years ago, Audi was what some people would describe as a sub-prestige brand, in with the likes of Volvo and Honda. Now they are very much on a par with BMW and Mercedes.’
The branding guru Wally Olins has written admiringly, for example, about the way in which Audi’s owner, Volkswagen, created a distinctive ‘deliberately understated, techno brand’ for the Audi marque that was seen as the inheritor of the Bauhaus design tradition in which form followed function – even though what was underneath the eye-catching body was a quite ordinary VW Golf substructure. ‘In today’s Audi, form doesn’t actually follow function at all – it just looks like it does.’
Fowler reckons that much of Audi’s success is down to its overall design philosophy, ‘not only in terms of the vehicles themselves, but also in terms of the Audi logo and the rather iconic Audi showrooms.’ For example, Audi has just built a huge new ‘Audi Centre’ overlooking the elevated section of the M4 in West London. ‘It’s a stylish building in a prime position,’ Fowler says.
Audi has polished its prestige in other ways, too. For example, the firm runs a chauffeuring service using a fleet of luxury A8 cars for the Bafta Film Awards, ballet performances, polo matches and other celebrity events. ‘This is often sneered at in the motor industry but that’s sheer jealousy,’ Fowler says. ‘BMW and Mercedes are now playing catch-up in this. It’s very clever management of the brand down to the finest detail.’
Audi is also bolstering the future value of its brand by telling the story of its past. In 1998, the firm launched ‘Audi Tradition’, a division dedicated to promoting the company’s heritage. ‘It’s our job to help people understand the long and unique history of Audi,’ says Thomas Frank, head of the 20-strong Audi Tradition team. ‘Some of our competitors, like Lexus, have no history, but we do.’ It’s Frank’s pleasant job to go to motoring events such as the Goodwood Festival of Speed and the Pebble Beach Tour d’Elegance and show off historic cars from the four companies that came together to form Audi: DKW, Horch, Wanderer and Audi itself.
‘We think that for a premier brand today, like Audi, BMW, Mercedes or Porsche, a major reason for buying a car is its history,’ Frank says. ‘For me, the most important thing is that people have glamour in their eyes when they talk about Audi, and feel the passion in what we are doing.’
Now that Audi has shaken off its sub-prestige image, its challenge is giving its new peers such as BMW and Mercedes a run for their money. ‘The difficulty for Audi is that it is now definitely playing amongst the big boys,’ says Fowler.
Another challenge for the brand is persuading consumers that its cars are not only prestigious and well made, but also green. ‘This is one area where they’ve been caught on the hop,’ Fowler says. ‘Audi doesn’t really have an environmental story. BMW leads the way by a country mile with its efficient dynamics. But I guess that’s what comes from playing catch-up for the past 20 years in every other respect.’