Is Audi's Strategy Of Striking When The Competiton Is Down Going To Yield Long Term Benefits?

Your industry is in the midst of a savage downturn and your competitors are slashing their marketing budgets. So what do you do? If you're German automaker Audi, you boost your U.S. ad spending by 20%, blow $6 million or so on a Super Bowl spot, and even sponsor television coverage of Barack Obama's inauguration. "We took the crisis as a huge opportunity," says Peter Schwarzenbauer, the Audi management board member in charge of marketing.

The contrarian approach seems to be paying off. The Volkswagen unit edged upward on this year's Best Global Brands list, to 65 from 67, while archrivals Mercedes-Benz and BMW slipped (though both still outrank Audi). More important, Audi's global sales have held up reasonably well, falling just 7.5% through August, vs. 17% at Mercedes and 18% at BMW. Audi benefited from its relatively fuel-efficient lineup and its strong position in China, where sales are still growing.

In fact, the financial crisis has been pretty good to Audi. In Europe this year the automaker has outsold Mercedes and BMW, a huge milestone for a brand that was close to extinction in the 1960s. In the U.S., Audi sold 8,000 cars in August, up 26% from the year before. For 2009, its share of the U.S. premium market has risen to 8.2% from 6.5%, though American sales are still down 10%. Globally, Audi aims to be the leading premium brand by 2015.


2009 Frankfurt Auto Show Photo Gallery