Audi reduces its product portfolio by 27 percent

Portfolio cut comes due to brand’s 'simplified premium' ethos; carmaker targets total reduction of 40-45 percent of models and options, down the line.

Published On Sep 13, 2019 07:00:00 AM

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Audi reduces its product portfolio by 27 percent

High-end models like the S5 need to be balanced out with youth-focused smaller cars

Audi has simplified its range by more than a quarter over the last year, in response cost-cutting and also the consumers’ demand for less complexity.

Options, as well as gearbox-engine combinations and certain models, for some markets have been axed, resulting in a 27 percent reduction in the product portfolio, and there is still more to go, according to the company’s CEO, Bram Schot.

He said he was hoping to cut complexity by up to 45 percent, from its starting point in summer 2018. “27 percent is not the end; the end will be 40 or 45 percent. We think it’s the new premium, it’s simplified premium.”

“It is not easy because at a global perspective, a take rate of 1 or 2 percent sounds like an easy decision but in a specific country that could be 70 percent of your sales. It’s very hard decision-making. We’ve done it, and we’re down 27 percent, so that’s huge.”

Further culls could also include model lines. Schot commented: “It’s not only models but variations – do we want to have a normal saloon and a sportback? We’re discussing this currently for a specific model.”

Schot said he wants to have 30 percent less model lines. However, he added Audi wanted to grow in higher segments with models such as the A6, A7, Q7 and Q8. At the same time, they want to attract younger customers, and that requires the need for more affordable, small cars.

“We want to get more penetration in high-end segment, but at the same time we want to increase young customers which you do not find in that segment.

He continued: “If you take an average customer over 50 years old, they have a completely different requirement set to connectivity and digitalisation than a 25 year old. But the cars where you can afford that most are the cars bought by those over 50.”

"How do we invest more in smaller cars which are affordable to [younger people]? And compare that with the high-end segment where older drivers have less requirements on digitalisation and connectivity. It is an interesting game we have to play for the future.”

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