Audi has simplified its range by more than a quarter over the last year, in response to not only cost-cutting but also consumer demand for less complexity.
Options as well as gearbox, engine combinations and certain models for certain markets have been axed, resulting in a 27% reduction in the product portfolio, and there is still more to go, said CEO Bram Schot.
He said he was hoping to cut complexity by up to 45% from its starting point in summer 2018. “27% is not the end, the end will be 40 or 45%. We think it’s the new premium, it’s simplified premium.”
“It is not easy because at a global perspective, a take rate of 1 or 2% sounds like an easy decision but in a specific country that could be 70% of your sales. It’s very hard decision-making. We’ve done it, and we’re down 27% so that’s huge.”
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Further culls could also include model lines. Schot commented: “It’s not only models but variations – do we want to have a normal saloon and a sportback? We’re discussing this currently for a specific model.”
Schot said he wants to have 30% less model lines. However, he added Audi wanted to grow in higher segments with models such as the A6, A7, Q7 and Q8. At the same time, they want to attract younger customers which requires the need for more affordable, small cars.
“We want to get more penetration in high-end segment, but at the same time we want to increase young customers which you do not find in that segment.
He continued: “If you take an average customer over 50 years old, they have a completely different requirement set to connectivity and digitalisation than a 25 year old. But the cars where you can afford that most is the cars bought by those over 50.
“How do we invest more in smaller cars which are affordable to [younger people]? And compare that with the high-end segment where more older drivers have less requirements on digitalisation and connectivity It is an interesting game we have to play for the future.”