Fleet News

Geneva Motor Show: Audi boss sees boom for premium marques

PREMIUM car makes could account for a quarter of all new cars sold in the UK if the new car market starts to mirror other areas of consumer spending.

From consumer electronic items to holidays and clothes, premium brands now account for as much as 30% of the market, yet premium car brands remain at about 14%. They are, however, rapidly growing their market share, increasing their sales by 17-18% last year, compared to a 12% rise for mainstream makes.

If current trends continue, a rise in premium brand share from 14% to 25% of the market would see an incremental gain of 200,000 premium cars hitting the road every year.

Kevin Rose, director of Audi UK, said: 'I think the strength of the premium brands will continue, because of the wider model ranges of premium manufacturers, their wholelife costs and the impact of their leading diesel technology under the carbon dioxide-based company car system,' he said.

Tracking research conducted by Audi shows that the price difference between an entry- level A4 or BMW 3-series and a mid to top of the range mainstream upper medium model like the Ford Mondeo has fallen from about 30% to below 20% over the past four years.

'And when you take into account residual values and convert that to a contract hire rate, a premium car is not going to cost that much more,' said Rose.

The situation is even more appealing for a company car driver, thanks to a general improvement in the specification of premium makes, and the low CO2 emissions of premium diesels - ideal for the new benefit-in-kind tax regime.

Audi is seeing a richer diesel mix in its sales, which ended last year at 35% of sales, although in the last two months this reached 40% of orders.

For fleet dominated sectors, the diesel share of Audi sales is even higher, touching 70% in some months for the A4 (and averaging about 50%), and doubling from 20% to 40% for the A6.

'The CO2 tax is helping the market. There were a lot of people who were paying the highest level of company car tax before and opted out, and they are opting back in, going for diesel or perhaps downsizing to a high specification premium car,' said Rose.

Audi is currently sitting on its largest ever future order bank of more than 16,000 cars, with every model ahead of expectations, and expects to sell 20,000 units in the first quarter of 2002.

Should this sales performance continue, the UK could overtake the US as Audi's second largest market behind Germany.

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