Audi's $66,000 A7 to challenge BMW, Daimler for luxury lead

Volkswagen AG’s Audi brand will target families looking for a sportier car with the new A7 Sportback as the automaker aims to leapfrog Bayerische Motoren Werke AG and Daimler AG in luxury car sales.

“We’re pushing into customer groups that are willing to pay more for their car, and that’s where the A7 will play an important role,” Chief Financial Officer Axel Strotbek told reporters at an event on the island of Sardinia late yesterday. “It’s clearly going to help us with our profitability.”

The A7, which goes on sale in western Europe at the end of October for 51,650 euros ($66,000), will help Audi lift sales in the compact and mid-size segments to 400,000 vehicles in 2015 from 250,000 this year, Strotbek said, declining to give the A7’s sales target.

The five-door car, Audi’s first model in a new product class combining sportiness with the top-end A8’s spaciousness, will compete with BMW’s 5-Series Gran Turismo and Daimler’s Mercedes-Benz CLS. The Ingolstadt, Germany-based carmaker has a goal of toppling BMW as the biggest luxury-auto maker in 2015.

“This will be a highly profitable product that can lift up Audi’s entire line-up,” said Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt, who has a “sell” rating on VW shares. “The mass production facilities offered by VW help on the cost side and bring a big advantage against BMW and Mercedes. Audi needs that because they don’t yet have the pricing power of their two competitors.”

Eight-month deliveries rose 18 percent to 726,590 vehicles, Chief Executive Officer Rupert Stadler said at yesterday’s event. Sales through August are 8 percent above the 2008 level, Audi’s previous best sales year, he added. August sales gained 22 percent, Strotbek said.

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