Why Audi needs to pick up speed in 2023

If you had to find a suitable animal for each of the Volkswagen Group’s 12 brands, the image of a lizard would come to mind for Audi. A lizard has a striking appearance but is also rather immobile most of the day.

Within the VW empire, no one doubts the competence of Audi’s engineers or the ability of the designers to create elegant premium vehicles. Still, Audi did too little in 2022 compared to its premium competitors Mercedes-Benz and BMW. And in 2023, there is little sign of improvement.

Postponed market launches due to software issues, the winding up of the Artemis autonomous flagship car originally planned for 2024 and falling behind in electric cars mean that CEO Markus Duesmann cannot be satisfied with the brand’s performance in 2022.

Audi is under close scrutiny from the Porsche-Piech families — VW Group’s majority shareholders who have always had a special affinity for the brand.

New VW Group CEO Oliver Blume — who also leads Porsche — has set himself the task of managing Audi more closely.

Audi is currently in a quandary: BMW and Mercedes are pulling ahead with more and more new models, while Chinese premium start-ups such as Nio are putting Audi under additional pressure.

China weakness

Audi’s weakness is noticeable in China, the industry’s most important growth market.

Sales of the high-margin A6 fell 31 percent in China in the first three quarters of 2022 and sales of the A8 range-toping sedean were down 36 percent.

“If you look at comparable models to the A6 such as the BMW 5 Series or the Mercedes E-Class in China, BMW was able to increase its sales figures in 2022. So it’s not because of the segment. The A6 has a problem in the market. Audi is not seen on the same level as Mercedes and BMW,” said Jochen Siebert, head of JSC Automotive, a consulting agency specializing in the Chinese market.

In response to Siebert’s comments, Audi pointed to a total of 496,295 vehicles delivered in China in the first three quarters and cited continuing supply bottlenecks, especially with semiconductors, as well as COVID-related production restrictions as reasons for its sales difficulties.

These problems will ease this year. But Audi still will lack a new top model to catch up with the competition in China, and also in Europe and the U.S.

The e-tron full-electric model, launched in 2019, has been upgraded and renamed the Q8 e-tron. It will arrive in European dealerships at the end of February. The U.S. market launch will be at the end of April.

The long-awaited Q6 e-tron is expected to be unveiled in the autumn. It is Audi’s first SUV on the new PPE electric platform developed with Porsche and the brand’s most important all-electric model launch this year. It’s also Duesmann’s first new full-electric car after three and a half years as Audi CEO.

A new A4 compact model could still come in 2023, and the A6, which is important as a business fleet car, is getting a face-lift. However, the A6’s full-electric version will not be available until 2024, while BMW will be able to offer its customers the i5 and i5 station wagon as early as this summer.

The mood among Audi’s dealers is bad. The new models are not coming fast enough for them.

And Audi’s competitors are making fun of the brand’s slick TV commercials for futuristic studies such as the Grandsphere. Their executives say: “We prefer to advertise cars on TV that you can buy.”

On Jan. 26, Audi will unveil its fourth Sphere concept called Activesphere. This is yet another vision whose realization is a long way off.

Audi’s sales are likely to drop this year because of its aging lineup. Its global deliveries fell 3.9 percent to 1.61 million last year on prolonged supply bottlenecks and major challenges in the logistics chain, the brand said in a press release on Tuesday.

The chips crunch is likely to ease this year but it will still be a problem. The lull in model launches will also lead to underutilization of Audi’s plants.

‘BMW North’

Audi’s problems and its high number of former BMW executives in top posts mean that Audi is being called “BMW North” by dissatisfied members of VW Group’s leadership in Wolfsburg, according to Spiegel magazine.

Audi’s Ingolstadt headquarters in Bavaria, Germany, is just 85 km north of BMW’s Munich base. Duesmann, sales chief Hildegard Wortmann and marketing boss Henrik Wenders are all former BMW executives.

The entire leadership of Audi’s Formula 1 team that is currently being created, also has a BMW past.

With the ouster of former VW Group CEO Herbert Diess, who also came from BMW, the executives are missing an important backer, said an insider.

High-ranking Audi managers say they have never heard the term “BMW North.” Nevertheless, the unease at Wolfsburg is not diminishing.

Before Christmas, there were rumors that Wortmann would be replaced in the near future. Wayne Griffiths, currently head of VW Group’s Seat/Cupra brands, was touted as her successor. Griffiths is a former Audi manager.

Audi strongly denied the rumors. But 2023 will be a year of probation for Wortmann. Audi has to deliver on sales.

For Duesmann, the key challenge will be to demonstrate that Audi is picking up speed to catch rivals.

If Duesmann is to remain as Audi CEO through to next year, the brand will have to gain momentum.

Duesmann will get another chance, an insider told Automobilwoche. “He has to take advantage of it,” the executive said.