Audi's hungry-looking front grille is looming ever larger in the rearview mirrors of BMW and Mercedes. Audi's sporty new models not only are powering faster global sales growth than German rivals but are also rapidly narrowing the profit gap with Bimmers and Benzes, according to results released by the company on July 3.
If the trend continues, by 2010 Audi's operating profit is likely to exceed that of BMW, and two years after that it may well overtake BMW in revenues, says Adam Jonas, London-based auto analyst at Morgan Stanley (MS). "It's all driven by new models," says Jonas, who expects Audi's vehicle sales to grow at an annual clip of 10% over the next three years—roughly triple the rate of BMW.
The recent crop of Audis clearly is surpassing expectations. The company, a division of Volkswagen, has dazzled car buyers with upmarket sporty cars and cutting-edge design ever since the 1998 launch of the iconic TT roadster. But few counted on Audi ever catching or overtaking its larger German rivals. Fast-forward nearly a decade and Audi is successfully wielding the same growth strategy premium-market leader BMW deployed in 2000 to outsell Mercedes. Audi, Germany's No. 3 premium automaker, is on a tear to expand its lineup of high-performance cars such as the posh Q7 SUV and the A5 coupe, and it's employing head-turning design to steal customers from the competition.
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