Signs are growing that German luxury carmaker Audi, which has boasted Vorsprung durch Technik – advancement through technology – as its slogan since the 1970s, is now losing sight of its own advice.
Research and development spending by the 81-year-old brand, which is the profit engine of parent Volkswagen (VW), last year amounted to less than three-quarters of arch-rival BMW’s outlay and a smaller fraction of Mercedes owner Daimler’s.
While BMW trumpets its new “i” series of electric cars and Mercedes wins rave reviews for its new CLA and GLA ranges of sporty compact models, Audi risks looking like a laggard in an industry where innovation is a major draw for customers.
“I’ve grown tired of that single-frame grille,” said Stefan Reimann, a 47-year-old public relations manager looking at the front of the new Audi A3 compact at a Berlin showroom. “BMW and Mercedes seem to be so much more progressive now. It’s about time for Audi to live up to their promise,” he added.
Audi contributed over 40 % of VW’s nine-months profit of 8.6 billion euros ($11.6 billion) and it is critical to funding the expansion of Europe’s biggest carmaker as it strives to overtake General Motors and Toyota and become world number one by 2018.
Any weakening at Audi could also add to doubts about VW’s broader strategy, with some analysts questioning whether a new manufacturing platform aimed at sharing costs among its brands will deliver the projected benefits, and whether it has cut prices too much to win market share in Europe.