Audi’s Spending Approach is Right for Success

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Audi R8 Spyder
Audi R8 Spyder

Most automobile manufacturers have taken big financial hits as The Great Recession continues to curtail consumer spending worldwide.  Two of the Big Three U.S. automakers filed for bankruptcy this year while receiving billions of dollars in bailout money.  Analysts estimate it can take years before the auto industry rebounds.   

While many auto makers are cutting back, one German car company is spending.  Bavaria-based Audi increased its 2009 marketing budget by 20%, advertising during the Super Bowl and introducing eight new models in the U.S. this year. The goal is to increase brand awareness among American consumers, and away from Audi’s European competitors such as Daimler AG’s Mercedes-Benz and BMW AG.

The strategy appears to be working thus far, even though the downed economy has shifted buying patterns among affluent drivers, who are now favoring smaller, sleeker models – a boon to Audi.  While sales are still down, they are less tragic than those of Mercedes and BMW.  Audi also grew its marketshare in the American luxury car market since last year.

Pumping millions of dollars into marketing at a time when consumers aren’t spending sounds ludicrous. On the contrary, it makes good PR sense.  What better instance to reach potential buyers than when other companies are cutting back on their communications budgets.  Fewer brands are being advertised, so there is less clutter in the marketplace.  Invest in your brand now, and reap the economic benefits when the economy turns around.

A common mistake by many organizations is to cut marketing and advertising during tough economic times.  This is when companies should be communicating most, especially to keep their constituencies apprised of new market developments.  Many auto industry pundits will be watching how the Audi strategy plays out.  The trick is getting other industries to do the same.

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