What you need to know:

• Luxury automotive brand Audi has seen remarkable sales growth in recent months, as the auto sector began to bounce back in June after being devasted by the pandemic.
• According to the Federal Chamber of Automotive Industries (FCAI), Audi saw year-on-year sales jumps of 84.6% and 53% in June and July respectively.
• Earlier this year Audi overhauled its digital strategy, launching an e-commerce offering and virtual test drives.
• The company’s shift to online involved heavy consultation with its dealer network to ensure location-based sales were in place.
• Audi CCMO Nikki Warburton tells Mi3 the pandemic has only “accelerated the inevitable” for the brand, as it resumes its plans to roll out 27 new models for 2020.
• In August Audi hired a new lead creative agency, The Monkeys, which created the company’s latest brand campaign during lockdown.
• Warburton says that while the auto sector is traditionally retail and transaction-led, brand and emotional connection have been prioritised to drive “desirability” for the Audi brand.

A new direction

After posting its lowest sales in more than two decades during April and May this year, the automotive industry started to shake off the pandemic June.

Some sectors recovered faster than others, with sales of luxury vehicles unexpectedly recording double-digit sales growth thanks to government tax breaks, spend shifting out of categories such as travel and concerns over public transport.

While brands such as Mercedes-Benz and Lexus benefited from the recovery, the strongest performer was Audi. According to the Federal Chamber of Automotive Industries, the German car maker’s Australian sales soared 84.6% in June and another 53% in July.

The strong sales followed a tough 2019 for Audi Australia, when its sales slumped from 6-22% (based on model), mainly because of a lack of new models and delays in production.  

Speaking with Mi3, Audi CMO Nikki Warburton says this year’s sales increase has been a bigger “boost for the brand” than originally expected, given the current economic climate

Warburton, who joined Audi just over two years ago in the top marketing role, says that like many others, the company has used COVID as the “accelerator for the inevitable”.

“Outside of above the line campaigns, we moved from a very physical [sales experience] to a digital experience, something we had to turn around quickly for our brand and dealer network,” Warburton says.

“We moved all of our 27 model launches [in 2020] from traditional press events, to virtual launches, which we've never done before. It’s actually something the category has never done before.”

Audi was forced to overhaul its digital strategy, launching its own first e-commerce solution. Working with the digital agency 303 MullenLowe, the company shifted a large amount of its customer interaction online.

It introduced virtual tours of its cars, which ran on video on demand (VOD) platforms, registering a 95% viewer completion rate. Online engagement Audi’s site has increased by double digits since April.

“As our physical [selling was] restricted, it was just about figuring out the right digital avenues, including our ‘Warehouse Walkaround’ series, which in effect acted as our online showroom,” Warburton says.

“Those were met with really strong engagement. For example, our Q3 and Q7 tour videos generated approximately 3.8 million unique views, so we knew we’d found a sweet spot.”

Warburton says one of key priorities when introducing the digital changes was keeping Audi’s “invaluable dealer network” engaged connected to the process. The company ensured geo location settings were enabled on its e-commerce platform so consumers were pointed to their nearest Audi dealer when in the final stages of purchase.

It also worked to its COVID-safe test drive options up-to-date as conditions changed, including the introduction of a “drop-off test drive”, where Audi staff took cars to potential customers.

“We know that a purchase of our product is a sizeable one, one that requires that touch and test experience before making the final decision,” Warburton says.

“That’s where we also had to utilise the strides we’d made digitally to assist customers with the ‘test and buy’ process, keeping them updated on how restrictions impacted coming into a dealership or repair centre."

What is driving sales?

While she is reluctant to predict the future, Warburton says there is reason to believe the recent growth in luxury auto sales could continue – albeit it at a lower rate – as people buy new cars instead of going on overseas holidays or spending money in other areas.

“The big Christmas holidays that people usual plan for have been put on hold or made into less expensive ‘staycations’,” she says.

“So we are noticing a trend of some people shifting their attention to upgrading or buying a new car in the luxury market.”

Warburton also believes concerns about using public transport and other pandemic-related changes in consumer behaviour could be good news for the auto sector.

“We’re making some assumptions here, but reports are indicating a surge in traffic [again] on roads in major cities, Melbourne excluded of course,” Warburton says.

“There’s also parents at home more often and finding themselves driving their kids back and forth from school regularly.

“COVID has caused quite a change in how people view their transport options and I think we’re seeing that represented in a portion of our sales increases.”

A new brand focus

While traditionally considered a retail and transactional category, Warburton says Audi’s approach to auto marketing is leaning more heavily on brand building than ever before.

She says while there will always be the need for price-point marketing in the category, COVID has given consumers more time to research and compare prices. Armed with more knowledge about pricing, people are then focusing harder on experience and engagement. That has led Audi to push “desirability” in its brand advertising.

“Two or three years ago we were heavily retail and price-point driven but now we have the chance to focus more closely on our brand messaging, especially given we are launching 27 new models,” Warburton says.

“This is why we’ve also kept our exclusive offers up and running as well, just in a virtual world, such as an online gin class with Brookie’s Gins out of Byron Bay.

“Many brands have talked about making a connection, then stuck with typical performance and digital marketing. We think now is the time to develop that brand value for existing and future customers.”

Developing new campaigns in this environment hasn’t been without difficulties, as the restriction around production impacted creative shops from the start of lockdown.

Appointing The Monkeys as the company’s new lead creative agency officially in August, despite the decision being made prior to COVID, has had its ups and downs, Warburton says.

“Some of our campaigns were really stop and start, particularly with Q model campaign, as we had limits on the amount of people on set, social distancing practices and other restrictions, not to mention our director was in lockdown in NZ, so we had to do the whole thing remotely,” Warburton says.

“However, being able to work through these challenges and still create several high quality, locally produced campaigns has proven the level of creativity that can be achieved in market despite restrictions.”