Management of Luxury Goods
20 . 05. 2008
AUDI CASE
What have been the main changes in the Audi strategy over the last 20 years?
As a result of the publication in 1986 of the article “Out of control” in 60 minutes, Audi suffered an enormous crisis. Such article accused the firm of selling an unsafe vehicle (the Audi 5000 sedan) which had been the consequence of several accidents. This incident negatively affected the company both in terms of sales and revenues, and more significantly, it completely ruined the brand’s image.
In order to tackle the problem, Audi decided to implement a trading up strategy. To do this, it upgraded its technical, functional and emotional characteristics:
Technical changes: Audi decided to carry out a complete change in the design of its cars. Originally, the company concentrated in producing cars which provided high performance whilst their image and design held a less important role. However, Audi soon realized that in order to successfully develop its trading up strategy, its cars had not only to present exceptional performance conditions but also, its design had to match with the new image that the firm was trying to reflect. Therefore, the models began to give a more elegant appearance but without loosing Audi’s philosophy: the passion for sportsmanship. It changed the traditional Audi 80, with its sober aspect, for the A4, which was longer and wider, providing the car with more space. Moreover, its design became more modern and aggressive, its lines were more elegant and the interior of the car was also carefully looked after, presenting a perfect finished to it and the best materials. Following up with the launching of the A4, the firm decided to create new ...