Imc - Audi

Industry Background

The automotive industry in Canada is currently the ninth largest auto producer in the world, and is the biggest contributor for Canada’s GDP. Over 550,000 jobs in Canada are formed from the $19.4 billion dollar industry. Automotive vehicles are a necessary part of most individual’s lives, and are used for work or/and pleasure. Vehicle assemblers in Canada are highly competitive and account for 3.7% of the world total population. With roughly 68.6 million units and a surplus of $13.8 billion in finished vehicles. General Motors, Ford Motors, Chrysler, Toyota, Honda, and Nissan to list a few have their own auto plants in Canada.

In North America, there are 3 automakers that are referred to as the “Big Three”, which consists of Ford, General Motors, and Chrysler. They were given this title in regards to sheer production volume and their business model. They are still within the top ten automakers in the world. The Automotive Partnership Canada (APC) provided $145 million in funding for research. With this funding, they will be collaborating research and developmental activities that will help the Canadian automotive industry.

http://www.apc-pac.ca/About-Renseignements/Background-Contexte_eng.asp http://www.aiacanada.com/about.cfm http://www.cvma.ca/eng/industry/industry.asp

Company Snapshot

Audi is owned by parent company “Volkswagen Group”. Audi’s philosophy wraps around “Vorsprung durch Technik” which essentially translates to “advancement through technology, and to leap ahead”. Audi prides themselves with high set standards, latest technology, and innovative technology. Audi was first introduced to the Canadian market in 1971 and are currently 41 Audi retailers nationwide. Audi AG resides in Ingolstadt, Germany.

Audi is one of the top luxury automobile companies in the market. Audi is currently ranked 4th behind Mercedes-Benz, BMW, and Infiniti. Audi has quite an extensive line up of vehicles: A3, A4, A5, A6, A7, A8, Q5, Q7, TT, R8, S-Models, and RS-Models. S & RS Models being top of the line, special edition, specifically tuned cars for special target audience individuals who want much more performance than the average Audi driver.

Audi is known for using Turbochargers and Superchargers in their vehicles to enhance overall performance at a relatively low cost, and also well known for their Quattro all-wheel drive system. Their most typical engine set up, the 2.0L TFSI engine is what most drivers purchase for a mix of performance and economy. 27,239 Audi TT units were delivered in 2012.

Audi has generated $6,807,530,000 in revenue during 2012 just in North America with a 12.6% market share. Audi’s target market is professionals’ age range 30-45 years of age, post-secondary completion, and primarily male. They want to attract those who desire a prestigious driving image with the performance to match. http://www.audi.ca/ca/brand/en/about/main/the_audi_brand.html#source=http://www.audi.ca/ca/brand/en/about/main/about_audi_canada.html&container=page http://www.audi.com/etc/medialib/ngw/company/investor_relations4.Par.0003.File.pdf/annual_finance_report.pdf

Competitive Review

Audi is part of what they call the “German Big 3”, which consists of Mercedes-Benz, BMW, and Audi. Mercedes-Benz is known as a high value luxury automobile. Consumers who purchase Mercedes vehicles purchase it for high luxury, smoothness, and comfort above all. Consumers who purchase BMW desire luxury attached with certain sportiness. These two German automakers have been rivaling since 1959. With Audi not being on par with the two German rivals before, they are now being viewed as a comparable brand to Mercedes and BMW.

According to Luxurydaily, affluent car buyers who make a purchase in the next 12 months would purchase Mercedes as top pick, BMW as 2nd, Infiniti as 3rd, Lexus as 4th, and Audi as 5th. Aside from just German automobile competition, Audi is also faced with competition from the Luxury sector of the Japanese Domestic Market (JDM). Two major JDM competitors include Infiniti and Lexus.

Competition cars to the Audi TT are the SLK by Mercedes, the Z4 by BMW, Infiniti G37, Nissan 370z, and Boxster by Porsche. Audi is known for using turbochargers in their automobiles which helps increase performance at an overall less production cost. Most of the Competitors to the Audi TT use naturally aspirated engines, aside from BMW