The A6 from VW’s luxury brand undercuts prices of rivals in high-end sedan segment


Volkswagen AG’s Audi luxury brand will target executives with a revamped A6 sedan to increase sales and lure customers from BMW and Daimler AGat the more expensive end of the product range.

“The A6 is the epitome of the top-of-the-range sedan,” development chief Michael Dick said in an interview.

“I’m convinced it will attract many buyers in the business community. This is an important segment for Audi.”

Audi aims to increase A6 deliveries by one-third after selling about 1 million of the model’s previous generation during its seven-year lifespan, Dick said at the carmaker’s headquarters in Ingolstadt, Germany. The overhauled version goes on sale in Europe in April starting at 38,500 euros ($53,655).

The A6, the carmaker’s second-best selling model, competes with the more expensive BMW 5-Series and Daimler’s Mercedes-Benz E-Class. The model, positioned between the A4 and A8, is key for Audi because it has better profitability than the A4 and higher sales than the flagship A8. Audi is showing the A6 at the Geneva auto show which began last week.

“The A6 is the most important car for Audi, it generates both margin and volume,” said Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen in Germany. “The model marks a gateway to the top range of the luxury spectrum.”

The VW unit, which has a goal of toppling BMW as the biggest luxury-auto maker in 2015, is enhancing the high end of its 36-model lineup, introducing the new A7 Sportback last year and an updated version of its A8 flagship sedan.

Audi will spend 11.6 billion euros worldwide outside China on new products, plants and technologies over the next five years. The brand aims to increase 2011 sales by about 10 percent to a record 1.2 million cars and sport-utility vehicles this year. Models hitting showrooms this year include the RS3 sportback, a hybrid Q5 SUV and the Q3 compact SUV.

The new A6 is shorter and wider than its predecessor and weighs up to 80 kilograms less thanks to increased use of aluminum and high-tech steels, Stefan Sielaff, head of design at Audi brand, said in an interview last month.

The A6’s share of its market segment will increase to 20.7 percent next year in western Europe from 18.9 percent in 2011, following the full introduction of the new version, IHS Automotive forecasts. The 5-Series and E-Class will both decline to 21.4 percent from 22.7 percent and 22.5 percent respectively, the automotive industry analyst said.

BMW, based in Munich, Germany, introduced a new version of the 5-Series sedan, priced from 40,300 euros, last March, a year after Mercedes came to market with its updated E-Class, the Stuttgart-based manufacturer’s second-best selling model. The E-Class sells in Europe from 39,835 euros.

Audi is ramping up production of the new A6 and wants to build about 200,000 of the car in the first year that output is running at full capacity, Dick said. Audi sold 204,300 A6s last year, second only to the 302,000 A4s, which is smaller, that the luxury-car maker delivered.

Still, BMW doesn’t anticipate 5-Series sales being affected by the pending introduction of the new A6, sales chief Ian Robertson said last month.

“The demand curve for the 5-Series will remain strong all year,” Robertson said at a Feb. 21 event. With the model now available in markets around the world including an extended version for China, “we’re having very strong demand,” he said.

The new AG hits the U.S. in the third quarter and will be priced “competitively” with the 7-Series and E-Class, spokesman Oliver Strohbach said. (Bloomberg)