Wednesday, 23 May 2018
Car News

Audi's Q3 is hitting its stride

Since the beginning of this year, the Audi Q3 crossover, shown, has closed the U.S. sales gap with the rival Mercedes-Benz GLA.

For most of its 24 months in the U.S., the Audi Q3 has been an odd duck.

Despite being a new entry from a hot brand in the growing crop of baby luxury crossovers, the Q3 notched just 13,229 sales last year, a little more than half of the volume enjoyed by the rival Mercedes-Benz GLA.

But this year, the Q3 is gaining momentum, and Audi is closing that gap. It posted 12,525 Q3 sales through August, a 46 percent gain from 2015 and within 3,000 units of the GLA. Q3 volume peaked in August at a record 2,238 sales, shattering its previous record of around 1,800 set in July and more than doubling the GLA’s August tally.

Thiemo Rusch, general manager of sales operations for Audi of America, says the Q3’s recent stride stems from a boost in production for the U.S. and the ongoing shift in luxury vehicle demand toward SUVs and crossovers.

Rusch said U.S. supplies of the Q3 were “very limited” early on as the brand focused on its sedan business. Early this year, Audi of America secured a larger share of Q3 output from the Seat plant in Martorell, Spain, and Rusch said supplies have been consistently higher since April.

“We got the right production to support true demand, and the customers are shifting heavily into SUVs,” Rusch said.

Comeback kid

The Audi Q3 rode a strong August to narrow the gap with its direct competitors in the market for premium compact crossovers.
  Aug. sales Change Jan.-Aug. Change
Lexus NX 5,407 22% 33,386 16%
Audi Q3 2,238 88% 12,525 46%
BMW X1 1,440 –38% 15,709 67%
Mercedes-Benz GLA 1,058 –51% 15,375 –6.9%
Source: Automotive News Data Center

Rusch: “We got the right production.”

The Q3’s hot streak underscores the significance of crossovers to Audi’s continued growth, while its rivals falter in the cooling U.S. luxury car market. Through August, Mercedes-Benz deliveries (excluding its Sprinter and Metris vans) are off 0.5 percent for the year, Lexus volume is down 5.3 percent and BMW sales are down 8.3 percent, according to the Automotive News Data Center. Audi, meanwhile, gained 3.5 percent in the same period. 

That growth is thanks almost entirely to crossovers, especially the Q3 and the Q7 large crossover. Audi light-truck volume grew 19 percent through August while car deliveries fell 7.3 percent. 

Devin Carlson, general manager of Audi Stuart in Florida who has 20 years of experience in Audi retailing, says he’s not surprised that the Q3 is catching on. He said the Q3 is a sporty, attractive and high-tech competitor to the GLA, BMW X1 and Lexus NX, which dominates the market for smaller compact premium crossovers. 

“It’s really just the car getting its due attention,” he said. “I was surprised it didn’t happen sooner,” 

In his South Florida market, Carlson says additional lease subvention has been a big help as well, especially for buyers shopping the Q3 as their first luxury vehicle purchase. 

Nationally, the Q3 has been a boon for Audi conquest business. About 70 percent of Q3 buyers are new to Audi, and about 70 percent of those are first-time luxury buyers, Rusch said. 

Conquest sales could be helped even more with the 2017 model changes. For the first time, the Q3 will be sold in entry-level Premium trim, effectively lowering its starting price to $32,750 from the outgoing 2016 model’s $34,625 base sticker, including shipping. 

“That just gives us more chances to conquest even more new customers to the Audi brand,” Rusch said. 

Rusch expects Q3 sales to hover around 2,000 units per month going forward, reflecting Audi’s focus on steady, profitable growth. 

“For us it’s more about finding the right balance between supply, demand, incentive spend and dealer profitability,” Rusch said. “I don’t believe we’re looking for much higher numbers.”

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