AM Online

Audi cuts continue

Revisions to the Audi retail network have seen around 38 of the 120 outlets change hands over the past 12 months. The process is part of a strategy that will see the company cut the number of partners from 90 in 2000 to 40. At the end of this year it expects to have 50.

“The dealers know who are preferred partners are and who we will be expanding with,” says Audi UK managing director Kevin Rose. “We have been very open with our plans and our exit plans have been amicable. We will end up with 40 partners that are very profitable and with fantastic outlets with whom we can build real relationships.”

Most of these businesses will be independent retailers, not plcs, who are focused largely, or totally, on the Audi brand: a large proportion sits outside the AM100. But Rose says he will not – and cannot – force retailers to sell the franchise against their wishes. “It’s possible that we might end up with more than 40 partners,” he adds.

“But we believe the Audi proposal is much stronger for a company with three or four outlets than it is for single sites who will find it harder to be as effective.”

Ex-Audi retailers are being offered the chance to become authorised repairers: around 60% have taken up the option, and Audi now has a network of 12 standalone repair outlets.

They can expect plenty of business as annual sales have doubled from 40,000 in 2000 to a forecast 80,000 this year off the back of new models like the Allroad, A6 and A8.

“That’s the best way to grow sales and is the way we will grow in the future,” says Rose. “It means more sales and more aftersales business, but also increases range complexity and demands of sales teams. They will have to deal with this.”

In order to cope with Audi’s throughput aspirations, some retailers will need to relocate. Rose predicts 40 sites will move over the next two to three years, and is also pressing for them to focus on used cars which, he admits, is an under-developed part of the business.

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