Company overview and market analysis for Audi

1666 words (7 pages) Essay

1st Jan 1970 Marketing Reference this

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Audi, this Germany brand was found by August Horch in 1899. Since this motor company established, Audi has been designing and manufacturing Audi cars in innovation and future conception. Today, Audi has became one of the three German super automobile manufacturers which producing the full range models, from economical, sport, luxury and sport utility vehicle. In the latest Audi annual report, the total revenue has reached to 29.8 billion euros with profits 1.35 billion euros by the end of 2009. What is more, Audi’s sales have increased significantly from 653,000 to 1,003,000 between 2000 and 2008, especially in the Middle East market and Chinese market. For example, Chinese government has agreed to purchase Audi car for officials in long term. Furthermore, Audi just launched the new supermini A1, the four door coupe A7 and the new generation flagship A8. In this essay, argument will be made that this German producer how to remain competitiveness under this changing environment. Audi Company and Audi’s P.E.S.T.E.L analysis will be covered by this German strong brand.

A8 Revolution

To compete against with the other two German brands Mercedes and BMW in the upscale markets, Audi has introduced the flagship model A8 in 1994. With the first vehicle using aluminum space frame technology and luxurious equipment, A8 gained considerable market share in the global executive luxury car field. The second generation of A8 launched in the end of 2002, Audi’s engineers met the development trend of automobile, taking a brand new A8 with new engine technology and longer wheelbase to customers. The successful sales of Audi A8 did not discontinue, Audi aims to be the number one in selling luxury car with introducing the third generation A8 in 2010. Audi has been designing and producing A8 for 16 years, the experience for making luxury car is a great treasure in this German automaker.

P.E.S.T.E.L. Analysis

Political

Since the last century, Germany is famous for making cars, such as, Mercedes, Audi and BMW; Porsche and Volkswagen. German government also encourages these motor producers showing the Germany made car to the customers from all over the world. Audi set the headquarters in Ingolstadt and have a strong human resource with over 60,000 staff from different nationality. With the Audi’s global strategy implementation, this German auto manufacturer has established several large plants in different countries. Hungary and China are good examples.

Economic

In 2008, the global economy recession spread over the world. Fortunately, the global economy is being recovery from the end of 2009, even though some countries are still facing credit crunch, such as Ireland; but most governments from different countries had confidence to making people’s life better. For example, in Germany, government spent billions supporting and encouraging German families to purchase; in UK, government also gave benefits, which means people get extra¿¡2,000 from the current car with more than 10 year life time when exchanging a new car in a dealer. According to the Audi statistics, sales of new car have increased sharply from 2009 to 2010 in the European and North American markets. What is more, Middle East and China are still the large demand group; For example, Audi has delivered 108,000 cars to China in the first three months, compared with the total sells 705,000 cars at the same period.

Social

Audi is a large car manufacturer in the world, the social impact is inevitable, this German giant owns over 60,000 staff in the world, and which means Audi support more than 60,000 families every year. In this aspect, Audi has been improving the workshop condition to satisfy employees, and Audi also offer successes of creating exceptional cars when employees join the group. Manufacturing perfect cars needs large quantity qualified material, Audi have established several partnership with suppliers. Due to the economy recession, consumers are willing to choose the fuel efficiency car instead of buying the big engine SUV; Audi remained the price for customer, but added more technology into the car.

Technological

Technology development is the key feature of Audi Company; Audi is best known of its permanent four wheel drive system, called QUATTRO. Today, Quattro is widely used in most Audi model, and offering drivers more safety and pleasure in any situations. In China, the heavy snow spread over the southern part at the winter of 2008, compared with Audi’s successful performance on snowy road, the competitor Mercedes realized it is the right time to fit the four wheel drive system into saloon and sport car. In comfort aspect, Audi introduced air adapted suspension; this equipment could adjust suspension in order to achieve best performance on different road condition. In 2010, the new Audi A8 is equipped with the 8 speed transmission which offers the soft and quick acceleration in order to achieve fuel efficiency. Audi also cooperated with Italian super car Lamborghini to achieve sport value. For example, the S8 and RS model are equipped with Lamborghini’s engine and transmission system.

Environmental

Audi paid more attention in corporate social responsibility .It is inevitable for Audi not polluting the environment, because it is a manufacturer. Audi promises to minimize the environmental impacts. In these 20 years, Audi spent billions in researching the efficiency engine; the new generation engine means more horsepower but little emissions. For example, the new TDI diesel engine has already meet the future European 5 emission standard. Furthermore, Audi announced car emissions will be cut further 20% by 2012. That is how this German maker leads the environmental car market.

Legal

Germany government set a group of legislation in order to protect road user’s safety and environment. Crash standard and European car emission limits are good examples.

4. A8: The upscale target market

“Audi’s flagship A8 L W12 takes driving to a whole new level of luxury”. This is true, even though car makers and customers are paying more attention in fuel efficiency car markets on today’s environmental condition, but every famous brand is still proud of their flagship, like Birkin handbag of Hermes. Flying used to be a pleasurable experience for most businessmen, especially for the fist class ticket. Cars can not fly, but Audi’s engineer made the dream become true. The new generation A8 providing exceptional and efficient luxury transport for passengers.

A8 means technology, comfort and luxury, especially from Germany. Audi’s most important features, aluminium body depends on Audi Space Frame, permanent four-wheel drive Quattro and air adaptive suspension. Since the first A8 was produced in 1994, A8 has firmly established Audi name in the luxury car market. According to the research, over half of luxury cars are produced by the German super three, almost 300,000 luxury cars delivered to customers worldwide each year; in addition, around 70% of these luxury saloon are sold to outside west Europe, especially for North American market and Middle East. The luxury car market was not influenced by the economic recession; the demand for luxury cars has increased for many years, especially for the new arrivals.

Audi gained highly reputation from A8’s loyalty customers in these years from all over the world, due to the changing group of luxury car buyers, the percentage of 30 to 40 years olds buyers increased sharply in this ten years. Audi are also willing to these potential buyers. Changing Ages is an important factor for luxury car segmentation; emotional factor could also influence customer’s decision. For example, luxury car is a symbol for people’s status orientation; what is more, the luxury car always understands the fashion, trend and design. Audi A8 is the best choice for the experienced loyalty buyers and potential group customers. Overall, this new generation flagship will take more market share to Audi in the luxury market.

Recommendations

The 21st century is also a technology era; Audi should continue spending billions and billions in innovation in order to achieve the mass markets. Secondly, climate change is a key issue in today’s world; Audi should pay more attention to social responsibility. Cutting emissions and materials recycling are good examples. Thirdly, due to the large increase demands from Asian market, Audi should enlarge its volume to satisfy this potential region, especially for the tier 2 and tier 3 cities of these countries. At last, the advertisement campaign is more and more important for car companies, Audi should design different type visual advertisement for marketing. In my personal experience, sitting in a silver Audi car with bright red from dashboard, just illustrate the meaning of an Audi car: machine with blood.

Conclusions

With 100 years experiences constructing motor machines, Audi became one of the most famous car manufacturer brands in the world. Audi car is illustrated by design, safety, comfort and sport. What is more, this German automaker giant achieved large market share and highly reputation from the whole world; Audi also established the products portfolio in order to meet different customer’s needs. For example, A4 and A6 are popular in the European market; the sales of large SUV Q7 and luxury A8 achieved considerable performance in the North American market. Furthermore, due to the scarce of resources and climate change, Audi realized it is important to decrease the environmental impacts during the operation. Like the new generation of Audi’s flagship A8, taking Audi to a new level of luxury; Audi company will take transportation into a new milestone.

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