Audi Challenges Dealers To Step Up To EV Sales Or Risk Taking Losses

Audi says auto dealers need to jump into the electrified vehicle market or risk losing an important profit center.

Speaking yesterday at the J.D. Power Automotive Summit, right before the opening of the National Automobile Dealers Association convention in New Orleans, Audi of America President Scott Keogh challenged dealers to make themselves competitive in a fast-changing marketplace of electric car launches, mobility, and connectivity. Audi is well poised to do it, he said.

“Do we want to jump in and compete? Without a doubt,” Keogh said. “We have the resources, the scale, the infrastructure, the customers (and) the dealers to compete in this new order.”

Audi will be launching three new all-electric vehicles in the U.S. by 2020. Keogh said it will be part of parent company Volkswagen Group’s campaign to roll out 30 battery electric vehicles by 2025. He thinks Audi will need its dealers supporting the effort for it to succeed.

Audi had announced last year that its first electric model will be a crossover SUV based on the e-tron quattro concept that was unveiled at the 2015 Frankfurt Motor Show. Arriving in 2018, the SUV has been rumored to be called Audi Q6 e-tron, and would be built at the company’s Belgium plant.

CEO Rupert Stadler also told a German newspaper last year that Audi’s electric car line up would also include an entry-level “A” (minicar) segment car.

Longer-range EVs and an ample charging infrastructure will be market force drivers to watch, he said. As the 200-plus electric cars start rolling out, Keogh predicts that EVs will soon reach the 400-mile mark, and eventually, 500 miles.

The growing charging infrastructure should close the deal for interested car buyers, Keogh said.  VW will play a big part in it, committing to spend $2 billion in the U.S. on public charging stations over the next 10 years as part of its diesel emissions settlement.

“All this fright about where am I going to get a charge is going to go away extremely fast,” Keogh said. “The technology on this front is moving at a staggering pace.”

Most U.S. dealers are well known for trying to divert car shoppers away from electric cars over to higher profit-margin sales. One of their main concerns is that EVs need a lot less maintenance work and parts replacement than do vehicles with internal combustion engines; which means dealers lose out on a revenue stream with EVs.

Keogh acknowledged that it’s an issue for dealers, with only about one-fifth fewer parts needing to be replaced or repaired in EVs compared to ICE-powered cars. Dealers need to look into new and distinct opportunities that EVs have to offer, he said.

Home-charging installation and other services needed by EVs could be excellent service opportunities for dealers, he said. There’s a host of opportunities with the EV’s battery pack and helping to customer in their home.

“You have the customers, you have the scale, you have the (marketplace) presence,” he said. “You need to become the 1-stop shop (on electrification). You need to be a part of their whole electric ecosystem.”

SEE ALSO:  Audi Plans Three Electric Vehicles by Decade’s End

The Audi of America chief also discussed the potential of the Trump administration dropping a 20 percent tax on imports from Mexico. Audi operates a plant in Mexico, building its critical all-new Q5 crossover there.

The company is taking a wait-and-see approach on it. He did admit that options are being looked into in case import restraints are enacted.

Looking into options and tapping into opportunities are integral to succeeding in the auto industry, he said.

“I’m in the automotive business,” Keogh said. “We run more scenario plans than you could imagine. We have plenty around this. We will brace for politically what comes our way and do it fairly and competitively.”

WardsAuto

 

 


More Hybrid News...