SWOT analysis of Audi (Premium car brand) 2016

SWOT Analysis of Audi 2016 (with Infographics)

 

Presented here is a SWOT analysis of Audi: Compared to most tier two luxury car brands, Audi’s position in the market has ascended rapidly. While the others struggled to gain a market share, Audi surged ahead faster. In key markets globally, it emerged as a powerful challenger for the top three – BMW, Lexus and Mercedes. Seems like Audi is bent on proving its mettle against  its rivals in the Asian markets too. At number one in China, it aims to widen the sales gap between it and number 2 BMW faster. Despite heavy competition from top luxury brands, it has proved a tough player globally. Even in the US market, it is a tough contender for BMW. Competition between the three German brands Mercedez, BMW and Audi is growing intense.

 [STATS & Facts on Audi – Audi Sales and R&D Expenses]

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Audi is a subsidiary of Volkswagen. (Volkswagen holds 99.55 percent of Audi AG’s share capital.) With its Audi and Lamborghini brands, Audi is also among the most successful premium car brands. Audi’s focus has been on compact luxury cars and high end sport utility vehicles. Its product portfolio has been further supplemented by the Ducati bikes. However, Audi has focused on both style and engineering. It made its foray into the hybrid segment with its Q5, A3 e-tron and Q7 e-tron. Continued focus on innovative technology is the main reason that its sales in US, China and European region were impressive. Audi’s current performance shows that it is geared towards fast growth. However, the race to the top is not easy. Moreover, Audi has some formidable competitors to deal with.

(Strengths):

    • Distinguished brand image
    • Large product portfolio with petrol, diesel and hybrid variants.
    • Superior quality and safety features.
    • Stylish looks.
    • Investment in latest technologies
    • Sponsorship of motor-sport and prestigious international sports events.
    • Strong growth in Chinese and Asian market

 

Audi has acquired a distinct brand image in the premium car segment. The reason is its outstanding quality of products and their elegant features. It brought a distinct generation of cars and SUVs to the market. The German car brand’s product portfolio has a large array of hatchbacks and sedans.  It includes Petrol and diesel variants as well as hybrids. Audi’s excellence lies in its products’ quality and technology. Its cars are stylish and unmatched in aesthetic beauty. Equipped with the best in class technology, every Audi drive is a delightful drive. For long, it has remained the forerunner in technology. Based on all these factors, it is a promising brand that has got all that its customers like.

Its Quattro technology was introduced some 35 years ago. Since then, it has ensured that every Audi drive is distinct in itself providing a fulfilling experience. Audi e-tron is a plug-in electric hybrid. It is designed to provide an all new level of exhilarating driving experience. Its MMI operating system allows for intuitive control over several systems including navigation, entertainment and even riding dynamics in select Audi models. In terms of interior and exterior design too Audi cars are excellent. It has continued to invest in superb and latest technologies. Its sales in the Chinese and US markets has evolved rapidly. Europe is already its stronghold. The brand also sponsors motorsport and other prestigious international sports. This has worked to improve its brand awareness.  Seen in the light of these facts, Audi’s future seems promising. India and China particularly seem to be in love with it.

 

(Weaknesses):

  • Perception of a tier two luxury brand.
  • High costs of maintenance

Audi has generally been perceived as a tier two luxury brand. On the one hand it provides some distinct advantages. On the other, it can be a profound weakness for the vehicle brand. It makes Audi’s position in Western markets weaker against the triumvirate – BMW, Mercedez and Lexus. Costs of maintaining Audi products are also high. Simultaneously, its focus on promotions has remained lower than its competitors. Its products are a major attraction for the media. However, compared to BMW or Mercedez, it has remained less aggressive in terms of promotional tactics.

 

(Opportunities):

  • Increasing demand of hybrid cars
  • Demand for premium cars growing in Asian markets
  • Diversify into low cost segments
  • Increased focus on brand promotion and market communication

The demand for hybrid technology is rising. Audi has done well by introducing a few tough SUVs equipped with hybrid technology. However, focusing on hybrids can help it gain a larger share in the global market. In Asian markets, the demand for luxury cars is growing. China and India have emerged as major potential markets. Audi should continue to focus upon these areas. Simultaneously, diversifying into low cost segment can also increase its sales. It should also pay attention to the marketing of its products a bit more aggressively. That will help beat the competition and churn demand. Overall, there are some major opportunities that Audi must not let go.

 

 (Threats):

  • Increasing competition
  • Saturation in luxury car market
  • Aggressive marketing by rival brands

The competition against Audi has kept rising. It has managed a lot of the pressure using its unique and elegant designs. Still, competition is not going to subside. The top players are aggressive. They market their products more aggressively than Audi. Rivals are not any less competent in technology either. Moreover, the luxury car market is saturated. Audi needs to focus on innovation to beat the competitive pressure.

(Recommendation):

Audi has been performing very well. Its focus on technology, design, style, CSR etc has paid it in the long run. However, Audi should focus upon its marketing strategy. It should try to diversify into the low cost segment to increase sales and profits. In this way, it might also be able to better manage the competition from BMW and Mercedez. Overall, Audi has demonstrated some excellent strategy and  deep focus on technological innovation. Still, to get at the top and remain there, it might need to further innovate its style and technology and focus on marketing. However, despite everything the brand has shown some excellent performance. It has risen faster towards the top in several markets.

Abhijeet Pratap

I have studied Marketing and English Literature and like to write on topics in Business management, Marketing, literature, latest technologies and other areas. I also like to spend my time learning coding.