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Audi sales climb - Stewart credits 'aspirational' demand for luxury, sets sights on No. 1 slot

Published:Wednesday | July 31, 2013 | 12:00 AM
Adam Stewart, CEO of the ATL Group. - File
A view of the spacious new Audi Terminal at the ATL Autohaus building's second floor. - FILE

Avia Collinder, Business Writer

Luxury automaker Audi AG has just had its best half- year in sales and so has the Jamaican dealership, says Adam Stewart, CEO of the ATL Group.

The three-year-old dealership is held by subsidiary ATL Autohaus, which operates out of New Kingston.

"We started with 12 cars in our first year - 2010 - and by the end of last year, we sold 178 cars," said Stewart.

"This year we are projecting 208, which will be 20 per cent up."

Stewart says he plans to grow Audi to the number one luxury brand in Jamaica.

That slot currently belongs to BMW, which is handled by Stewart Motors, but owned by a different family of Stewarts.

Duncan Stewart, general manager of Stewart Motors, said BMW sales were up 20 per cent at half-year, but declined to disclose the number of units sold.

As to Adam's assertion that Audi would soon claim pole position, Duncan appeared unperturbed.

"BMW is number one in the premium car category by virtue of the products and service that we sell. We are selling the best car," he told Wednesday Business.

"One of the unique selling points is five years of maintenance and service included. No other premium retailer can match that," said the Stewart Motors GM.

Audi AG, a German auto manufacturer, posted what the company states was the best first half-year sales total in the company's history thanks to year-on-year growth of 6.4 per cent.

Worldwide, the company sold 780,500 cars in the first six months of 2013, led by rising demand in China, the United Kingdom, and the United States.

Stewart said Audi's premium appeal is also gaining traction locally because Jamaicans desire the brand as a symbol of mobility.

"Jamaica is an SUV market. Our top sellers are the Audi Q3 and the Audi Q5," he said.

"Audi sits in the premium segment. People see it as a very aspirational brand."

Stewart also notes that the German automaker has been developing cars with smaller engines aimed at reducing the brand's price point.

"They are making cars which are still very much aspirational but are coming down into the price point of a Suzuki. Years ago, getting into a super-premium car in the J$3-million range was unheard of," Stewart said.

Jamaica's auto market is still attracting buyers, but dealers have been complaining for the past several years that heavy taxes have thinned their margins and driven away business from their showrooms.

"Every dealer is making less," Stewart said this week.

Evidence of demand, he says, lies in ATL Automotive's mid-year sale events in which 295 cars were sold in 36 hours.

The sale included Audi as well as VW, Honda, Jaguar and Land Rover.

"We sold a lot of cars at extremely low prices. In many instances, we gave up to 80 per cent of margin because we were way overstocked," he said.

"At that time, we had over 500 cars on the ground. We became very overstocked. We paid the Government over US$3 million in duty in that one sale, which I am very proud of. Even though I had to cut my margin, the Government got their full duty. Two hundred and ninety-five people got new cars."

The sale cleared space for 2014 models.

Stewart noted, however, that dealers who similarly moved to clear old stock are not likely to restock at previous levels, as demand has been affected by new charges applied to engine sizes over 2.0 litres.

"The Government makes duty on sales. The increase they have put on the duty will not compensate for the fall in demand. ATL is strongly capitalised. We will weather any storm. But I don't think we will be able to deliver more revenue for the Government compared to what we have. Discounting has cut margins," he said.

Stewart says Audi is expected to be the number one seller in the premium segment by next year.

"Five years ago, Mercedes was number one; now they are number three," he said.

BMW has held steady as the top luxury brand in Jamaica.

The Mercedes-Benz and BMW dealerships, as well as Suzuki, are handled by Stewart's Automotive Group.